Dáil Éireann debate -
Wednesday, 14 May 1997

Vol. 479 No. 3

Written Answers. - Special Savings Accounts.

Michael Woods

Question:

116 Dr. Woods asked the Minister for Social Welfare the cost of establishing special savings accounts for old age non-contributory pensioners in respect of up to £5,000 which will not be subject to means testing, up to £10,000 which will not be subject to means testing and up to £15,000 which will not be subject to means testing; and if he will make a statement on the matter. [13069/97]

Minister for Social Welfare (Proinsias De Rossa)

The establishment of special savings accounts for old age pensioners and the associated costs are not matters for which I have any direct responsibility.

The Deputy will be aware that this year's Social Welfare Act provides for a significant improvement in the method of assessing capital for old age pensioners. Under the existing arrangements, an initial disregard of £200 is allowed, the next £375 is assessed at 5 per cent and the balance is assessed at 10 per cent. The new capital assessment arrangements for the old age (non-contributory) pension, which will come into effect from October, provide that 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. These new arrangements, which will cost £4.3 million in a full year, mean that single old age non-contributory pensioners will qualify for the maximum rate of payment where they have capital of up to £6,160. The equivalent amount of capital for a couple will be £12,320, i.e. an increase of £6,345 on the existing provisions. An old age non-contributory pensioner will still qualify for a reduced rate pension where he-she has capital of up to £35,500 in the case of a single person, or £71,100 in the case of a couple.