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State Pension (Contributory) Eligibility

Dáil Éireann Debate, Tuesday - 1 July 2014

Tuesday, 1 July 2014

Questions (242)

John Halligan

Question:

242. Deputy John Halligan asked the Minister for Social Protection if she will look into the case of a person (details supplied) in County Waterford; the methodology used by her Department in the calculation of notional income in respect of adult dependant applications for old age pensions; if she will acknowledge that the method of calculation currently used is flawed and generally does not represent a true reflection of an applicant's notional income for the purposes of assessment; if she will commit to having the shortfalls in the methodology assessed to ascertain if there would be a better process that could be followed; and if she will make a statement on the matter. [28274/14]

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Written answers

The assessment for increase for qualified adult in the State pension (contributory) of the person concerned has been reviewed, and I am satisfied that the correct procedure has been applied. A claimant's entitlement to personal weekly rate of State pension (contributory) is not means tested. It is based on a person's social insurance record and they must satisfy certain eligibility conditions. An increase in the weekly rate of State pension (contributory) payable in respect of a qualified adult (IQA) may be claimed in respect of a dependent spouse, civil partner or cohabitant of the main recipient. This increase is a means tested payment and account is taken of the income and assets of the person in respect of whom an increase is being claimed (allowing for a 50% apportionment of jointly held assets, where applicable). IQA is payable at the maximum weekly rate where the qualified adult’s means, as assessed in accordance with social welfare legislation, are €100 a week or less. Reduced rates of IQA are payable where the qualified adult's means are between €100 and €310 a week. There is no entitlement to an increase where assessed means are in excess of €310 a week. No account is taken of the income or assets of the primary recipient for the purposes of determining whether an increase for qualified adult is payable or not.

For the purposes of determining the means of a dependent spouse/civil-partner/cohabitant, account is taken of their income from employment, self-employment, rental income and occupational or personal pensions, etc. Where the qualified adult is the owner of property (including savings and investments, but not including property which is rented), social welfare legislation provides that the value of such property is assessed on a notional basis. Such property includes all monies held in financial institutions or otherwise, the market value of shares, as well as houses and premises (excluding the family home) owned by the qualified adult which are not put to commercial use. 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, is longstanding. The assessment formula is not designed to mirror potential interest or annuity rates available to investors or depositors and no account is taken of any such income in the overall means assessment.

The current assessment provisions date from 2005 when the initial amount disregarded increased from €12,697 to €20,000, thereby continuing and enhancing the policy of ensuring that those with property and capital of modest amounts receive the greater share of available support, while those with larger amounts of capital are in a position to avail of it to contribute, at least partially, towards meeting their needs.

The current capital assessment formula for IQA purposes is as follows:

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

Any changes to the current assessment arrangements would have to be considered in a Budgetary context.

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