Written Answers. - Pension Provisons.
Richard Bruton
Question:
165
Mr. R. Bruton
asked the
Minister for Social, Community and Family Affairs
the way in which his Department can justify putting a value of £40 per week on savings of £10,000 in respect of applicants for a non-contributory old age pension; and if he will make a statement on the matter.
[24695/01]
In assessing means for old age (non-contributory) pension 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.
Following a review undertaken by my Department, I made provision in the Social Welfare Act, 2000, for the introduction of a new assessment method for capital which came into effect from October of that year. This new method applies to all social assistance schemes other than supplementary welfare allowance. Up to October 2000, the first £2,000 (2,539.48) of capital was disregarded, the next £20,000 (25,394.76) was assessed at 7.5% and the balance was assessed at 15%.
Under the new method the first £10,000 – 12,697.38 – of capital is disregarded; capital between £10,000 – 12,697.38 and £20,000 – 25,394.76 – is assessed on the basis of £1 – 1.27 – weekly means for each £1,000 – 1,269.74 – of capital; capital between £20,000 – 25,394.76 – and £30,000 – 38,092.14 – is assessed on the basis of £2 – 2.54 – weekly means for each £1,000 – 1,269.74 – of capital; and capital above £30,000 – 38,092.14 – is assessed on the basis of £4 – 5.08 – weekly means for each £1,000 – 1,269.74 – of capital.
The revised arrangements introduced in 2000 considerably benefited both single and married old age non-contributory pensioners, by up to £22 – 27.93 – per week in the case of single pensioners and £33 – 41.90 – per week in the case of married pensioners.
Currently, assuming that persons have no other means, a single pensioner with capital of up to £16,999 – 21,584.28 – will qualify for a full pension while single pensioners with capital of up to £47,999 – 60,946.16 – will qualify for a minimum pension. The equivalent figures for married pensioners are £33,999 – 43,169.83 – and £94,999 – 120,623.85 – respectively.
I understand that the Deputy is referring in particular to the rate of assessment of capital in excess of £31,000 – 39,361.88. This must be seen in the context of the capital assessment arrangements as a whole and the total amount of capital which such a pensioner has. The new system continued and enhanced 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.
