Tuesday, 4 February 2014

Questions (348, 349, 350, 351)

Noel Harrington

Question:

348. Deputy Noel Harrington asked the Minister for Social Protection further to Parliamentary Question No. 412 of 15 January 2014, the date on which the present formula for the assessment of means regarding capital, property and investments for social welfare applicants was first introduced; if any amendments have been made to that formula since then; and if she will make a statement on the matter. [5497/14]

View answer

Noel Harrington

Question:

349. Deputy Noel Harrington asked the Minister for Social Protection further to Parliamentary Question No. 412 of 15 January 2014, the basis and principles that were used in calculating the present formula for the assessment of means regarding capital, property and investments for social welfare applicants; and if she will make a statement on the matter. [5498/14]

View answer

Noel Harrington

Question:

350. Deputy Noel Harrington asked the Minister for Social Protection further to Parliamentary Question No. 412 of 15 January 2014, if she will consider amending the present formula for the assessment of means regarding capital, property and investments for social welfare applicants to allow for a person to disregard the first €250,000 of property where a person is living somewhere else because of a previous job or family commitments; and if she will make a statement on the matter. [5499/14]

View answer

Noel Harrington

Question:

351. Deputy Noel Harrington asked the Minister for Social Protection further to Parliamentary Question No. 412 of 15 January 2014, if she will consider amending the present formula for the assessment of means regarding capital, property and investments for social welfare applicants to allow for a person to disregard the first €250,000 of property where a person is constructing a house but it is not yet habitable; and if she will make a statement on the matter. [5500/14]

View answer

Written answers (Question to Social)

I propose to take Questions Nos. 348 to 351, inclusive, together.

In assessing means for social assistance payments, account is taken of the income and the value of property, including capital, of the claimant and their spouse / partner. Social welfare legislation provides that the yearly value of property (including capital) owned but not personally used or enjoyed is assessable for means testing purposes. Such property includes all monies held in financial institutions or otherwise, the market value of shares as well as houses and premises owned by a claimant which may or may not be put to commercial use. However, it does not include property such as the family home a person is personally using or enjoying i.e. residing in or, for example, a premises used by the claimant in carrying out a business.

The current market value of the relevant property is established (having regard to local property prices) as well as the amount of any outstanding mortgages on that property. The balance (market value less outstanding mortgage) is assessed by reference to a notional formula.

The current assessment method, involving a disregard of an initial amount of capital and an increasing notional weekly value for amounts in excess of the disregarded amount, came into effect in October 2000 for most welfare schemes. The assessment formula is not designed to mirror potential interest or annuity rates available to investors or potential rental income from a property and no account is taken of any such income in the overall means assessment. The formula introduced in 2000 continued and enhanced the policy of ensuring that those with property and capital of modest amounts of capital receive the greater share of available support while those with larger amounts of are in a position to avail of it to contribute, at least partially, towards meeting their needs.

This property/capital formula also applies where a person has other types of property (including capital such as monies held in financial institutions or otherwise or the market value of shares). The assessment formula for most schemes, including jobseeker’s allowance and one-parent family payment, was last updated in 2005 – see table below - and included an increase in the initial amount disregarded from €12,697 to €20,000.

AMOUNT OF CAPITAL

WEEKLY MEANS ASSESSED

Up to €20,000

Nil

€20,000 - €30,000

€1 per each €1,000

€30,000 - €40,000

€2 per each €1,000

Over €40,000

€4 per each €1,000

For the purposes of the State pension non-contributory and carer’s allowance the amounts above are doubled in the case of a couple. From 2007, the amount disregarded in the case of disability allowance is €50,000, up from €20,000, and in the case of supplementary welfare allowance is €5,000, up from €520.

Where a person has moved out of a property and is no longer personally using or enjoying that property i.e. not residing in same on a full time or part-time basis, the value of the property is assessed as described above. Where a property is under construction, account is taken of the value, if any, of the particular. building. In such cases, the value may be negligible and would need to be examined on a case by case basis. Any changes to the current assessment arrangements would have to be considered in a Budgetary context.