Written Answers. - Social Welfare Benefits.
Olivia Mitchell
Question:
281
Ms O. Mitchell
asked the
Minister for Social, Community and Family Affairs
if he will ensure that the equity release in relation to elderly residents purchasing reversionary interests is treated on the same basis as a normal sale for means testing for old age non-contributory pensions.
[31439/01]
The sale of residence provisions have very specific policy objectives which may not apply in the case of equity release arrangements. In general, the sale of residence provisions involve assisting older people and people with disabilities who sell their principal residence, to move to accommodation which is more suitable for their needs or to move to a private nursing home. From April 2002, these groups will be able to avail of the provisions where they sell their principal residence to move in with their carer or move to sheltered or special housing.
Equity release and other similar products allow home owners to benefit from some of the capital tied up in their homes, while continuing to live in these. The introduction of these products has implications for all non-contributory payments where the claimant is aged 65 years or over.
These non-contributory payments are designed to provide financial support for people who do not qualify for one of the contributory pension or benefit schemes. Entitlement to these payments is based on a means test which is intended to ensure that available resources are targeted at those who are most in need. Accordingly, any resources that a claimant and his/her spouse or partner may have are assessed.
At present, sums of money raised through these products are assessable under the Department's capital assessment rules. Sums of money raised which are spent or disposed of immediately are not included in the means assessment.
The Social Welfare Act, 2000, made provision for the introduction of a new assessment method for capital from October last year. This method is applied to all social assistance schemes other than supplementary welfare allowance.
Under this method, the first £10,000 of capital is disregarded; capital between £10,000 and £20,000 is assessed on the basis of £1 weekly means for each £1,000 of capital; capital between £20,000 and £30,000 is assessed on the basis of £2 weekly means for each £1,000 of capital; and capital above £30,000 is assessed on the basis of £4 weekly means for each £1,000 of capital.
As the balance of capital on hands decreases, the claimant is entitled to have his or her means reassessed. This system reinforces the policy of ensuring that those with modest amounts of capital receive the greater share of available support, while the proportion of people with larger amounts of capital should avail of it to contribute, at least partially, towards meeting their needs.
As the Deputy may be aware, a study on the future financing of long-term care is under way. The role of equity release products in funding long-term care needs is being considered in this context. I expect that this study will be published early in the new year.
Question No. 282 answered with Question No. 51.
Michael Creed
Question:
283
Mr. Creed
asked the
Minister for Social, Community and Family Affairs
if, in the context of the Residential Institutions Redress Bill, 2001, which proposes to exempt awards made from scrutiny by social welfare inspectors in the context of means tested payments, he will take this matter up with his counterpart in the United Kingdom.
[31375/01]
The Residential Institutions Redress Bill, 2001, does not in fact make any provision to exempt awards made for the purposes of means-tested social security payments. However, there is provision under social welfare legislation to do this and has been used to exempt moneys received by way of compensation awarded to persons who have contracted hepatitis C and to persons who have disabilities caused by Thalidomide in the assessment of means for social assistance purposes. When the Residential Institutions Redress Bill is completed it is proposed to make legislative provision to exempt these awards from the means assessment for social assistance payments.
The Minister for Education and Science has already been in touch with the UK authorities in relation to potential beneficiaries resident in that jurisdiction and I will keep in touch with my colleague on this issue.
