Written Answers - Means Tests.
Willie Penrose
Question:
56
Mr. Penrose
asked the
Minister for Social, Community and Family Affairs
if he will amend the guidelines governing the social welfare means test to ensure that any income accruing from the capital on deposits reflects the actual income in view of the recent change in interest rates which has no resemblance to actual income from money on deposit; and if he will make a statement on the matter.
[24641/98]
The means tests used in determining entitlement to all social assistance payments include an assessment of the value of any capital or investments which the applicant may have. As there are over 472,000 people in receipt of social assistance payments it would not be feasible 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 whenever interest rates fluctuated. For this reason a notional value is ascribed to the capital owned.
Over the years different methods of assessing the value of capital have been applied to the various social assistance schemes. However, more recently the process of standardising the assessment of capital across the different social assistance schemes has been initiated, so as to achieve greater equity in the system. The introduction of the disability allowance scheme in October 1996 provided the opportunity to commence this process. Under the new assessment provisions, the first £2,000 of capital is disregarded, the next £20,000 is assessed at 7.5 per cent of the capital value and the balance is assessed at 15 per cent.
These revised capital assessment provisions were extended to the old age non-contributory pension, widow's and widower's non-contributory pension, orphan's non-contributory pension, carer's allowance and pre-retirement allowance schemes from October 1997 and to the rent allowance scheme for former controlled tenancies from June, 1998.
The revised capital assessment provisions are of benefit to the majority of social assistance recipients who have capital. For example, a single old age pensioner can now have capital of up to £6,160 and still qualify for the maximum rate of old age non-contributory pension — an increase of £3,173 on the previous arrangements. A married couple can have capital of up to £12,320 and still qualify for the maximum pension — an increase of £6,345. A single pensioner can have up to £37,150 and still qualify for the minimum rate of pension, while a married couple can have up to £74,300 before losing entitlement to the pension.
In addition, the effective assessment rates of capital have been lowered for most recipients with capital. For example, under the former arrangements the effective assessment rate for all levels of capital for old age non-contributory pension purposes was approximately 10 per cent in the case of single people and 5 per cent for a married couple. Under the new procedures, capital of up to £20,000 is now assessed progressively up to a rate of 6.75 per cent in the case of a single pensioner and up to a rate of 3 per cent in the case of a married pensioner couple. As only about 2 per cent of single old age pensioners and 4 per cent of married pensioners have capital in excess of £20,000, the new arrangements have improved the income position of the vast majority of old age pensioners.
Any further improvement of the capital assessment procedures including their extension to schemes would have cost implications. These schemes not yet covered, namely unemployment assistance and supplementary welfare allowance would have to be examined in a budgetary context in the light of available resources and having regard to the commitments contained in the Government's Action Programme for the Millennium, Partnership 2000 and the national anti-poverty strategy.
Willie Penrose
Question:
57
Mr. Penrose
asked the
Minister for Social, Community and Family Affairs
if he has satisfied himself that widows and widowers are being treated in an equitable manner compared with other social welfare recipients; and if he will make a statement on the matter.
[24639/98]
The widow's and widower's pension schemes recognise the particular financial difficulties that arise for people following the death of a spouse. To qualify for a widow's or widower's contributory pension, a person may use the full social insurance record or the record over the previous three or five years to satisfy the yearly average condition. Also a widow or widower can qualify on his-her own or late spouse's record.
The weekly rate for the widow's-widower's contributory pension at £74.10 if under 66 and £76.10 if over 66, is currently 103 per cent of the Commission on Social Welfare's recommended main rate. The non-contributory rate at £70.90 if under 66 is 99.8 per cent of the commission's rate.
The one-parent family payment is available to those widows or widowers, with children, who do not qualify for a contributory widow's-widower's pension. This payment is available to men and women who are parenting alone and it is designed to, firstly, provide basic income support, taking into account the special needs and requirements of single parents, and, secondly, to encourage lone parents to return to the workforce so that, over time, they can achieve a greater degree of economic independence. To this end, an earnings disregard of £6,000 per year is available under the one-parent family payment means test to those lone parents in employment.
A widow's and widower's non-contributory pension is available to those widows and widowers without children who do not qualify for the contributory pension. This is payable subject to a means test. I understand that the Deputy is particularly interested in access to the free schemes. Free travel is available to all people in the State aged 66 years and over. The other free schemes such as free electricity allowance, free TV licence and free telephone rental allowance are available to people living in the State, aged 66 or over, who are in receipt of a social welfare type payment and to certain people with disabilities under the age of 66 who are in receipt of certain welfare type payments.
In addition, widows-widowers aged from 60 to 65 whose late spouses had been in receipt of the free schemes retain that entitlement. This is to ensure that households do not suffer a loss of entitlements following the death of a spouse. The free schemes were originally designed to benefit mainly older people in receipt of a social welfare type payment who were living alone and required additional assistance. However, over the years, additional categories of people have been included.
A fundamental review of the free schemes will commence in early 1999, to assess whether the objectives of these schemes are being acheived in the most efficient and effective manner. If the Deputy has any particular areas in mind, I would be glad to consider them as part of this review process.
The question of future improvements for widows and widowers — as for all social welfare clients — is a matter for consideration by the Government in a budgetary context in the light of available resources. I am satisfied widows and widowers are being treated in an equitable manner compared with other social welfare recipients.
