Dáil Éireann debate -
Thursday, 20 Jun 1996

Vol. 467 No. 3

Written Answers. - Social Welfare Grants.

Eoin Ryan

Question:

18 Mr. E. Ryan asked the Minister for Social Welfare if he will give an estimate of the cost of extending the capital disregard of £2,000 available to persons in receipt of a disability allowance and a one-parent family benefit to other means-tested payments, in particular unemployment assistance, non-contributory old age pension and widow's non-contributory pension. [12943/96]

Brian Cowen

Question:

47 Mr. Cowen asked the Minister for Social Welfare whether he will charge the actual interest earned rather than the notional rate of interest in the assessment of means for social welfare assistance schemes; and if he will make a statement on the matter. [12946/96]

Minister for Social Welfare (Proinsias De Rossa)

I propose to take Questions Nos. 18 and 47 together. During the debate in this House on the Social Welfare Bill, 1996, I made known that I was taking the opportunity of the introduction of the new one-parent family payment and disability allowance to commence the process of standardising the provisions for the assessment of capital across all the various social assistance payments. In determining entitlement to these payments, the first £2,000 of capital will be disregarded, the next £20,000 will be assessed at 7.5 per cent and capital in excess of £22,000, if any, will be assessed at 15 per cent.

The extension of these provisions to other social assistance payments will have to be done progressively over a period of time. However, in view of the significant administrative implications involved. There are about 430,000 people in receipt of a social assistance payment at present and the means of all those with capital will have to be reviewed on the introduction of changes to the present arrangements.

For this reason, it would not be feasible from an administrative point of view to assess means from capital on the basis of actual returns from investments as this would necessitate frequent reviews of the entitlements of a very significant number of recipients as rates fluctuate. I consider the provisions for the assessment of capital under the new one-parent family payment and new disability allowance preferable to the uncertainty likely to be caused to low income families from any attempt to assess actual interest earned on capital.

In addition, the substantial £2,000 initial disregard under the new arrangements will significantly reduce the effective interest rate for most recipients and will mean that claimants are not effectively assessed at 7.5 per cent until their level of capital approaches £25,000. The cost of extending these arrangements to other social assistance payments is in the region of £9.5 million in a full year.