Dáil Éireann debate -
Tuesday, 11 Apr 2000

Vol. 517 No. 6

Written Answers. - Social Welfare Code.

Pádraic McCormack

Question:

93 Mr. McCormack asked the Minister for Social, Community and Family Affairs the rate of interest on savings calculated when assessing the income from savings of applicants for social welfare and pensions; the proposals, if any, he has to have this adjusted to the current rate of interest available; and if he will make a statement on the matter. [10547/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern):

In assessing means for social assistance purposes account is taken of any cash income the person may have, together with the value of capital and property. For the purposes of assessing the value of capital and property a notional assessment method is used. The use of the notional method avoids the necessity of frequent reviews of the entitlements of a very significant number of recipients whenever interest rates fluctuated or whenever the capital was moved from one investment option into another.

Under the current assessment method, the first £2000 is disregarded, the next £20,000 is assessed at 7.5% and the balance is assessed at 15 per cent.

However, following a review undertaken by my Department last year, I have made provision in the Social Welfare Act, 2000, for the introduction of a new assessment method from October of this year. This new method will be applied to all social assistance schemes, other than supplementary welfare allowance.

Under the new method the first £10,000 of capital will be disregarded; capital between £10,000 and £20,000 will be assessed on the basis of £1 weekly means for each £1,000 of capital; capital between £20,000 and £30,000 will be assessed on the basis of £2 weekly means for each £1,000 of capital; and capital above £30,000 will be assessed on the basis of £4 weekly means for each £1,000 of capital.

Based on the results of a recent sample survey, some 94,000 old age non-contributory pensioners – over 98% – have no capital or have insufficient capital to be assessed with means under the new arrangements. The limited information available on the number of recipients of other social assistance schemes with capital would suggest that most of these would have amounts below £10,000. Therefore, the majority of social assistance recipients who have capital will not be assessed with any means because of that capital.

The new system continues with the policy of ensuring that those with modest amounts of capital receive the greater share of available support, while the small proportion of people with large amounts of capital should avail of it to contribute, at least partially, towards meeting their needs.