Written Answers. - Social Welfare Benefits.

Theresa Ahearn

Question:

748 Mrs. T. Ahearn asked the Minister for Social, Community and Family Affairs the income supports provided for people with disabilities; if he will give details in this regard; and if he will make a statement on the matter. [1340/99]

The Department of Social, Community and Family Affairs administers a broad range of income support payments for people who are ill and people with disabilities, including the contributory schemes of disability benefit for people who are unfit for work due to illness and invalidity pension for people who are permanently incapable of working; occupational injuries benefits for those who are unfit for work or who are disabled as a result of an accident at work; the means-tested disability allowance (formerly disabled person's maintenance allowance) and blind person's pension schemes for people whose employment capacity is sub stantially restricted because of their disability; and the means-tested supplementary welfare allowance for the people who are incapable of work and not entitled to disability benefit or not permanently incapable of work.

In addition, the health boards operate a number of other income support schemes, including the infectious diseases maintenance allowance, domiciliary care allowance, blind welfare allowance and mobility allowance schemes.

There are now six separate payments being administered by the Department for people who are ill and people with disabilities Accordingly, the potential for the rationalisation of this range of income supports, including the introduction of sickness allowance scheme for people who are temporarily incapable of work but not entitled to disability benefit, will be examined during the year. This examination will have to have regard to the cost of any proposals, commitments in An Action Programme for the Millennium to overhaul the means by which the State supports the incomes of people with disabilities, and the recommendations contained in the report of the Commission on the Status of People with Disabilities.

Proinsias De Rossa

Question:

749 Proinsias De Rossa asked the Minister for Social, Community and Family Affairs if he will extend the back to school clothing and footwear allowance scheme to cover children in receipt of orphan's pensions; and if he will make a statement on the matter. [1364/99]

The back to school clothing and footwear allowance scheme, which is administered on behalf of my Department by the health boards, is designed to assist certain recipients of social welfare and health board payments with the cost of children's school uniforms and footwear. Certain people on low incomes who are in receipt of family income supplement may also qualify for assistance.

In order to qualify for the allowance, the claim must be in respect of a qualified child, the applicant must be in receipt of a qualifying payment and must satisfy a specified means test. In the case of applicants who are in receipt of a short-term payment, such as unemployment benefit, a qualified child is one who is aged between two and 17 years in respect of whom a child dependant allowance is payable. In the case of applicants who are in receipt of a long-term payment, such as widow's pension, a qualified child is one who is aged between two and 22 years and in respect of whom a child dependant allowance is payable.

The rate of payment depends on the age of the child. A payment of £43 is made in respect of each qualifying child aged between two years and 11 years, while the rate payable in respect of qualifying children aged 12 years or more is £58.

The means test takes account of any income over and above appropriate rate of widow's and widower's contributory pension plus £5 where the guardian is single, and contributory old age pension plus £5 where the guardian is one of a couple.
Where the income of a household exceeds these limits, the back to school clothing and footwear allowance is not payable.
Orphan's pension is not a qualifying payment under the terms of the back to school clothing and footwear scheme. The orphan's pension is payable to the guardian and is intended to cover the child's cost of living, including food, clothing and footwear. The payment rate is up to £48.60 per week. In comparison, the allowance paid in respect of dependent children with other social welfare or health board payments, ranges from £13.20 to £17 per week. The higher rate of orphan's pension as compared with the child dependant allowances rate means that the guardian receives an additional income of up to £1,840 per annum in respect of the orphaned child.
Any change in the scheme to provide for payment of the back to school clothing and footwear allowance to recipients of orphan's pension would have to have regard to other families on lower incomes who do not qualify for such a payment on the grounds of excess means.
However, the back to school clothing and footwear allowance scheme will be reviewed in 1999 and the suggestion that the scheme be extended to include those orphan's pension will be examined in that context.

Jim O'Keeffe

Question:

750 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs the estimated cost of removing the artificial basis for the assessment of means at 7.5 per cent and 15 per cent of bank deposits in applications for non-contributory old age and widows and widowers pensions. [1439/99]

Trevor Sargent

Question:

752 Mr. Sargent asked the Minister for Social, Community and Family Affairs the plans, if any, he has to reassess the situation of pensioners with savings exceeding £22,000 who are currently assessed by his Department as getting interest rates of 15 per cent, when the realistic level of interest is much lower as a result of the introduction of the euro; and if he will make a statement on the matter. [1589/99]

It is proposed to take Questions Nos. 750 and 752 together.

The purpose of the means test is to ensure that available resources are directed at those most in need. Accordingly, any resources that a claimant may have, whether by way of cash income or investments, is assessed.

As there are over 450,000 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. This standardised assessment method was extended to old age, widow's and widower's (non-contributory) pensioners from October 1997. Under the revised 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.
However, while the formula for assessing capital includes rates of 7.5 per cent and 15 per cent, it is important to note that the effective assessment rates are in fact much lower than those levels.
In order to determine the effective assessment rates account must be taken of the significant capital disregard of £2,000 provided. In addition, there are other aspects of the means test which, when they interact with the above formula, operate to further reduce the effective assessment rates. For instance, the first £6 of weekly assessable means do not affect entitlement to payment. In the case of a couple, means are taken to be half of the joint means. This results in a couple being able to have double the amount of means that a single pensioner can have.
The revised method of assessing capital is designed to take account of all of the above factors. Accordingly, old age, widows and widowers pensioners can now have significant amounts of capital and still qualify for payment. For instance, a single old age pensioner can have capital of up to £6,160 and still qualify for the maximum rate of old age (non-contributory) pension. A married couple can have capital of up to £12,320 and still qualify for the maximum pension. Furthermore, a single pensioner can have up to £38,348 in capital (£40,428 from June) and still qualify for the minimum rate of pension, while a married couple can have up to £76,696 – £80,856 from June – before losing entitlement to the pension.
The majority of old age pensioners have no capital or have insufficient capital to be assessed for means test purposes. Only a very small minority have capital in excess of £20,000 so in practice the effective rate of assessment of capital is well below 7 per cent in the vast majority of cases.
The present arrangements are designed to effectively ensure that those with smaller amounts of capital at their disposal receive a greater share of available support than those who have large amounts of capital available to contribute at least partially to meeting their needs.
I am aware that the interest rates available on investments have fallen in recent times, particularly in the context of the introduction of the euro. In this regard, my Department is reviewing the formula currently used for assessing the value of capital. However, any proposals to further ease the assessment of capital would have financial implications, the actual cost of which would obviously depend on the particular nature of the revised method of assessment chosen. Accordingly, any such proposals would have to be considered in a budgetary context having regard to the available resources and other commitments contained in An Action Programme for the Millennium, Partnership 2000 and the National Anti-Poverty Strategy.
Finally, I would like to mention that the £6 per week increase for elderly pensioners announced in the recent budget will be of benefit to all old age, widow's and widower's pensioners aged 66 and over. This means that all such pensioners will receive the £6 increase in full, even where they are receiving a reduced rate of payment because of the assessment of means.