My amendment proposed that the Minister, in co-operation with the Minister for Health, would extend the carer's allowance to include a special provision for caring for people with severe disabilities. I know this matter has been a topic of discussion for some time because it was under way when I was Minister. I was anxious to obtain some arrangement with the Department of Health. Will the Minister consider with the Minister for Health defining people with a severe disability because, if they were specified, it would be possible to substantially extend income limits in such cases or to have no income limits? It would be useful in considering the development of the scheme.
SECTION 23.
Question proposed: "That section 23 stand part of the Bill."
I do not propose to delay the committee explaining the carer's allowance as the Deputy knows it well. We are introducing an improvement this year which provides 150 per cent of the standard rate for those caring on a full-time basis for more than one person.
I welcome that.
I initiated a joint study between my Department and the Department of Health on the carer's allowance to see what improvements we might examine. This is one of the issues which arose during that study. The carer's allowance provides for people with disability who are 66 and older. The disabled person's maintenance allowance provides an allowance for people with disabilities aged 16 and over. The domiciliary care allowance, paid for by the health boards is for people under 16 and provides an income for parents of children with a severe disability. There are payments already available for people with disabilities, under 16, over 16 and over 66. I do not see the need for the Deputy's amendment but, nevertheless, I am happy to have the matter examined in the context of the ongoing study which I initiated and which is being undertaken between the Departments of Health and Social Welfare.
Question put and agreed to.
Section 24 agreed to.
NEW SECTION.
I move amendment No. 18:
In page 30, before section 25, to insert the following new section:
"25.—The Minister shall prepare and lay before Dáil Éireann an annual report on the operation of the assessment of the yearly value of capital and property for means assessments and the factual basis for the percentage adopted.".
There has always much been contention and argument about the percentages adopted so it is time there was an annual clear and open statement about them which would establish the reasoning for the specific percentage chosen in the assessment of the value of capital and property. The Minister has reduced the figure under the older system to 7.5 per cent. I accept that and it is welcome. However, it should be an open system whereby people can clearly see on an annual basis why specific rates are used and how they relate to the overall situation. In the past, interest rates frequently varied. It is hoped the situation will be more stable with the Maastricht Treaty and that it will be possible to clarify for everyone the rates chosen. The Minister is going some way in that direction in this Bill but he should set out the reasoning behind it because it would put an end to much of the questioning which occurs during the year and it should be done by laying it before both Houses.
In view of the improvements I have introduced in this area in the past two budgets, this amendment is unnecessary. I am continuing this year with the process of improving and standardising the provisions for the assessment of capital and savings. This year's Bill extends the provisions for the assessment of capital to old age non-contributory, blind and widow's and widower's non-contributory pensions and carer's allowance. I also propose to extend these provisions to the pre-retirement allowance later this year.
Under these arrangements, the first £2,000 of capital and savings is disregarded, the next £20,000 is assessed at 7.5 per cent and capital in excess of £22,000 is assessed at 15 per cent. The disregard of £2,000 of capital results in a relatively low effective interest rate. For example, the effective rate for a single person on old age pension with capital or savings of £5,000 is 4.5 per cent. At £10,000, the effective rate is just 6 per cent. Even at £20,000, it is only 6.75 per cent. The benefits of the new arrangements for couples on old age pension are even more dramatic in that a couple with £10,000 are effectively assessed at 2.25 per cent compared with the present 5 per cent.
The effective rate for couples with £20,000 is just 3 per cent compared with over 5 per cent at present. Recipients of pre-retirement allowance and widow's and widower's non-contributory pension are not effectively assessed at 7.5 per cent until their level of capital or savings approaches £25,000.
These examples illustrate the progressive nature of the new arrangements. The existing arrangements are mainly regressive as the effective interest rate reduces as the amount of capital held by claimants increases. In view of the nature of the improvements and that the standardisation of the provisions for the assessment of the capital across the various social assistance schemes is now almost completed, the Deputy's amendment is unnecessary.
The Minister has explained what has been done but does not give the basis of how it was done. We should have a more open situation where the basis for deciding percentages is explained and the explanation laid before both Houses of the Oireachtas. That does away with the need for repeated clarification because the explanation will be before both Houses and can be referred to. It can state what is the position for this year or, if the situation is stable, for the next three years. I will not press the amendment but this is all it provides for. It is not draconian, just a simple openness provision. It is the way we are heading and the more we go that way, the less the Minister will be bothered with questions during the year because the basis for the decision taken will be available, clearly seen and agreed to.
Amendment, by leave, withdrawn.
Amendments Nos. 19 and 20 not moved.
Section 25 agreed to.
Sections 26 to 32, inclusive, agreed to.