Dáil Éireann debate -
Tuesday, 8 Feb 2000

Vol. 513 No. 6

Adjournment Debate. - Social Welfare Benefits.

Mr. Durkan

The Minister for Tourism, Sport and Recreation, Deputy McDaid, will appreciate the reasons for my bringing this to the attention of the House. The matter refers to the case of a constituent who has been in receipt of the old disabled person's maintenance allowance, introduced in the 1960s, arising from an unfortunate illness. He has received the payment up now.

In recent years the name of the disabled person's maintenance allowance has been changed to disability allowance. The then Minister for Social Welfare, Deputy De Rossa – who was my colleague in Government – and I gave an undertaking when the appropriate legislation was introduced to the House that there would not be any change in the manner in which people would be assessed and treated under the new system, that is, that people would not be disadvantaged as a result of the introduction of the disability allowance.

However, during the summer it emerged that a review was taking place with regard to this case on the basis of an assessment of the applicant's means and it was determined that his payment would be reduced. I challenged this decision by way of a parliamentary question and the matter rested until the applicant reached old age pension age, which he did recently. Given the new situation, it now transpires that the means of assessment in respect of old age pension differs from the means of assessing disability allowance. The result is a considerable reduction in this constituent's entitlements. His pension will be reduced from approximately £114 per week to approximately £92 per week.

This is a peculiar outcome at a time when the country is enjoying prosperity, when everybody expects more and when everybody with a justifiable case is making it with vigour. It is ironic that in this case a person who has suffered from severe disability for the past 30 year should, at the start of the new millennium, have to face a reduction in his income for a reason that escapes me. A clause has always been applied in determining social welfare entitlements of those in receipt of a means tested payment and who would qualify for one or two payments at a given time, to the effect that the qualifying person would receive the higher of the two incomes and would not, in consequence, suffer a reduction in income.

Will the Minister convey to his colleague, the Minister for Social, Community and Family Affairs, the serious trauma caused by the reduction in benefit in this case? The man in question lost both legs through an illness in 1967-68. He has lived when others would have given up, has learnt to walk again with artificial limbs and has continued to try and live a normal life, in so far as he can. Given the state of the economy it would be a huge travesty of justice and a sad reflection on us all if he were to receive a reduction in benefit given his pain and effort during that period.

Dr. McDaid

I apologise for the absence of the Minister for Social, Community and Family Affairs. Unfortunately he is unable to be here due to another engagement. On his behalf I thank the Deputy for raising this matter. As it entails a complex reply I assure him I will raise it with the Minister when I next meet him.

As the Deputy is no doubt aware, the determination of entitlement under the statutory old age non-contributory pension scheme, or entitlement under any other statutory social welfare scheme, is not a ministerial function. Under the relevant legislation, these are matters for deciding officers and, in the event of appeal, for appeals officers, appointed in accordance with the provisions of the Social Welfare Acts. Nonetheless, the Department can clarify for the Deputy the basis on which the pension rate applicable to the person concerned has been determined and the reasons for the change on his previous payment position.

The person concerned, who had been in receipt of disability allowance at the maximum rate of £114.70 per week, reached pension age of 66 years on 6 January 2000. Disability allowance had been in payment to him at the maximum rate because his previous entitlement under the former disabled person's maintenance allowance scheme was preserved under special transitional arrangements. These arrangements were put in place on the transfer of existing disabled person's maintenance allowance recipients to the new dis ability allowance scheme administered by the Department.

These transitional provisions are limited to the duration of the claimant's entitlement under the disability allowance scheme. They do not extend to subsequent entitlements arising under other social welfare schemes, such as old age non-contributory pension, which are effectively treated under the legislation as a new claim to be assessed in accordance with standard means rules. The person concerned has now been awarded an old age non-contributory pension of £92.70 per week with effect from 7 January 2000, by reference to the social welfare legislation pertaining to this scheme. This amount comprises a personal rate of £58.50 and an increase of £34.20 in respect of his wife. The Deputy will be aware that the person concerned has recourse to the appeal process if he is not satisfied with this decision.

The decision is based on a means assessment of £25.96 a week, deriving from the capital value of a second property owned by him. Under the former health board assessment for disabled person's maintenance allowance purposes, and preserved when the person concerned transferred to disability allowance, his means had been assessed at £4 a week on the basis, it is understood, of the rental income from the second property. The legislative basis for the assessment of means from capital or property for pensions purposes is set out in rule 1(1) of Part II of the Third Schedule to the 1993 Social Welfare (Consolidation) Act. The rule states that in assessing means, account is taken of property owned but not personally used. This is a long-standing provision affecting the assessment of means for old age pension purposes. There is, therefore, no change in practice in the assessment of means from this source for old age pension. Persons receiving disabled person's maintenance allowance in the past would not have been treated any differently when their time came to claim old age pension.

The legislation is based on the principle that non-contributory pensions, which are financed by the Exchequer out of general taxation, should be related to the person's need. These payments are, therefore, means-tested and the rules for the calculation of means take account of the person's ability to meet his own needs in determining if and to what extent the taxpayer should be called upon to subsidise his income. Under the legislation, the property must be assessed whether or not it is producing an income. If an income is not being derived from a property, the owner has options which it is in his interests to exercise. In the current economic climate it should not be difficult to realise a return from the house property which is at least equal to the assessment in this case. The Deputy will also be aware of substantial improvements in the capital assessment rules which were announced in this year's budget.

Under the new arrangements which will come into effect in October this year, the first £20,000 of capital in the case of a married couple will be completely disregarded. In the case of single people, the first £10,000 will be disregarded. This marks a substantial increase on the current capital disregards of £2,000 and £4,000 for a single and married couple respectively. The revised capital assessment method will be extended to unemployment assistance as well as pensions. This will provide a significant increase in capital disregard levels at a cost of £5 million. The Deputy can be assured that the means of the person concerned will be reviewed again later this year in the context of these improved capital assessment rules.

It should also be pointed out that it is open to the spouse in the circumstances of this case to apply for a carer's allowance. The Department has already arranged to issue an application form to her. In the event that the spouse would be entitled to that allowance, the overall income position of the couple would be improved.