I propose to take Questions Nos. 135 and 136 together.
Social assistance payments, including state pension (non-contributory), 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 or her spouse or partner may have are assessed. These resources may include cash income, property, or an asset which could bring in money or provide the claimant with an income. This system of means assessment is designed to ensure that those with modest amounts of capital receive the greater share of available support while those with larger amounts of capital should avail of it to contribute, at least partially, towards meeting their needs.
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 them. Sums of money raised through life loans or equity release are assessable under my Department's capital assessment rules. Sums of money which are spent or disposed of immediately are not included in the means assessment. Furthermore, as the balance of capital on hands decreases the claimant is entitled to have his/her means reassessed. Capital is assessed as follows:
the first €20,000 of the capital is disregarded.
the next €10,000 is assessed at €1 per €1,000.
the next €10,000 is assessed at €2 per €1,000.
any sum remaining in excess of €40,000 is assessed at €4.00 per €1,000.
The sale of residence provisions, to which the Deputy also refers, are designed to facilitate certain persons who are in receipt of a means-tested payment from my Department in selling their principal residence for the purpose of:
buying or renting alternative accommodation,
moving into a private nursing home,
moving in with a carer who is in receipt of carer's allowance or carer's benefit in respect of them, or
moving to sheltered or special housing in the voluntary, co-operative, statutory or private sectors.
Where alternative accommodation is being purchased the difference between the agreed sale price of the former residence and the agreed purchase price of the replacement residence, subject to a maximum of €190,461, is exempt from the means test. Where no alternative accommodation is being purchased the gross proceeds of the sale are defined as the agreed sale price of the residence and are disregarded in the means test also to a maximum of €190,461. These provisions apply to recipients of disability allowance, blind person's pension and those over age 66 years who receive a means-tested payment from this Department and they are intended to facilitate choice for certain people who might previously have been living alone or in unsuitable accommodation. In contrast, equity release arrangements are designed to provide an income stream for older people and it is considered appropriate that these should be assessed for means test purposes.