Billy Timmins
Question:70 Mr. Timmins asked the Minister for Social, Community and Family Affairs the method by which capital is assessed for unemployment assistance applicants; and the plans, if any, he has to change this assessment. [19043/99]
Written Answers. - Social Welfare Benefits.
In assessing the value of capital for the purposes of unemployment assistance the first £400 is assessed at 5 per cent and the balance is assessed at 10 per cent.
Over the years different methods of assessing the value of capital have been applied to the var ious social assistance schemes. For instance, until recently under the old age non-contributory pension scheme the first £200 of capital was disregarded; the next £375 was assessed at 5 per cent; and the balance was assessed at 10 per cent. Where the weekly means exceed £1, an additional £1 was added. In the case of the widow's non-contributory pension scheme and analogous payments the first £200 of capital was disregarded; and the balance was assessed at 5 per cent. Again, where the weekly means exceed £1, an additional £1 was added.
This led to significant differences in the treatment of capital under the various social assistance schemes. Accordingly, it was decided to introduce a standardised method of assessing capital across all social assistance schemes. The introduction of the disability allowance scheme in October 1996 and the one-parent family payment in January 1997 presented the opportunity to commence this process.
Under the revised capital assessment method, which was provided by my predecessor, the first £2,000 is disregarded, the next £20,000 is assessed at 7.5 per cent and the balance is assessed at 15 per cent. This standardised method has now been extended on a progressive basis to all social assistance schemes, other than unemployment assistance and supplementary welfare allowance.
However, since the standardised method of assessing capital was first introduced in 1996, interest rates available on investments have fallen significantly. In the circumstances, I have arranged for my Department to review the current standardised method of assessing capital.
As I have already indicated, the original intention had been to extend the standardised method of assessing capital to all social assistance schemes. However, in view of the changed circumstances in relation to interest rates it would be preferable to await the outcome of the review before making any changes in method of assessing capital for unemployment assistance purposes. I should point out that any relaxation of the current rules would have financial implications and could only be considered in a budgetary context.
Jim O'Keeffe
Question:71 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs his views on whether there is a need to increase the fuel allowance last increased in 1985 when it was established at £5 per week in line with the increase in inflation between 1985 and today; and the proposals, if any, he has in this regard. [18940/99]
The aim of the national fuel scheme is to assist householders who are on long-term social welfare or health board payments and who are unable to provide for their own heating needs. A payment of £5 per week – £8 per week in smokeless zones – is paid to eligible households for 26 weeks from mid October to mid April.
In order to be eligible for assistance under the national fuel scheme, the person must satisfy a means test. A substantial improvement in the means test was introduced by me in the 1999 budget. A person may now have a combined household income of up to £30 per week or savings/investments of up to £22,400 over and above their pension and still qualify for fuel allowance.
Any increase in the rate of payment would have to be considered in the light of the modest increase in domestic fuel prices since the current rate of the fuel allowance was set, taking into account the substantial increases in primary payment rates over the same period.
The fuel and light component of the Consumer Price Index rose by 9.6 per cent between August 1985 and August 1999. Increasing the basic allowance by this amount would increase the rate from £5 to £5.48 per week. The additional expenditure for the 1999-2000 fuel season would be £4.4 million.
The national and smokeless fuel schemes were reviewed in 1998 as part of my Department's series of programme evaluations. The review group took the view that improvements in the national fuel scheme cannot be looked at in isolation from the improvements in the primary weekly payment rates. With regard to the payment rate, the group concluded that the present rates of payment should remain unchanged if improvements in primary payment rates fully compensated recipients for all price inflation, including fuel price inflation. In that regard, substantial increases in all the social welfare primary payments of either £3 or £6 per week were paid from June 1999.
Fuel allowances are not the sole mechanism through which assistance is provided to people with heating needs. There is a facility available through the supplementary welfare allowance scheme to assist people in certain circumstances who have special heating needs. An application for a heating supplement may be made by contacting the community welfare officer at the local health centre.
Where a person would not normally qualify for a heating supplement there is provision under the SWA scheme to pay an exceptional needs payment. ENPs are payable at the discretion of the health board taking into account the requirements of the legislation and all the relevant circumstances of the case.
Expenditure on the national fuel scheme has increased by approximately 20 per cent in the last six years from £37.5 million in 1993 to £44.9 million in 1998. This year a sum of £46.4 million has been provided in the Estimates for the scheme.
Any change in the rate of payment would have significant cost implications and could only be considered in a budgetary context.