Written Answers Nos. 160-169
160. Deputy Derek Nolan asked the Tánaiste and Minister for Social Protection if pension schemes that were initially set up as defined benefit schemes but which subsequently became buy-out bonds will be accessible as an approved retirement fund following new rationalisation provisions that are currently being examined by her Department; and if she will make a statement on the matter. [39449/15]
View answerWhilst the Department of Finance is ultimately responsible for policy regarding the rules around allowing access to the Approved Retirement Fund option for Buy Out Bonds whose values have transferred from Defined Benefit pension schemes, I can confirm that officials in my Department are involved in the consideration of this issue as part of a wider review of pension savings vehicles.
Although I am not in a position to presume any outcome, I do believe that the current supplementary pension system, which comprises a multiple of pension savings vehicles that have evolved over time, has become extremely complex and difficult to understand without investment of considerable time and effort and the engagement of professional advisors. I have highlighted previously that the present system needs to be simplified so that it is more understandable to members, potential members and to the general public.
161. Deputy Éamon Ó Cuív asked the Tánaiste and Minister for Social Protection if she will accept a late application for a water conservation grant from a person (details supplied) in County Galway given that her Department did not issue a letter inviting the person to apply for the water conservation grant; and if she will make a statement on the matter. [39451/15]
View answerThe eligibility criteria for the Water Conservation Grant are set out in the Water Services Act 2014 (Water Conservation Grant) Regulations 2015. Under regulation 5(1) a person who registers with Irish Water, as required under section 5(2)(a) of the Water Services Act 2014, on or before 30 June 2015 shall be eligible to receive the grant for 2015 if they were normally resident at the principal private residence on that date.
To date Irish Water has transferred details of over 1.3 million registered households to this Department. The details of the householder concerned have not yet been included in those transfers. However Irish Water will continue to forward details of registered householders for 2015. Such householders are eligible to receive the Water Conservation Grant and this Department will be in touch with such householders if and when their details are received from Irish Water.
162. Deputy Jack Wall asked the Tánaiste and Minister for Social Protection the status of an application for a carer's allowance by a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39468/15]
View answerI confirm that the department received an application for carer’s allowance from the person concerned on 30 September 2015. Once processed, the person concerned will be notified directly of the outcome.
163. Deputy Jack Wall asked the Tánaiste and Minister for Social Protection the status of an application for a carer's allowance by a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39470/15]
View answerI confirm that the department received an application for carer’s allowance (CA) from the person concerned on 1 July 2015 in respect of two care recipients. It is a condition for receipt of a CA that the person(s) being cared for must have a disability whose effect is that they require full-time care and attention.
This is defined as requiring from another person, continual supervision and frequent assistance throughout the day in connection with normal bodily functions or continuous supervision in order to avoid danger to him or herself and likely to require that level of care for at least twelve months.
The evidence submitted in support of this application was examined and a deciding officer decided that this evidence did not indicate that the requirement for full-time care was satisfied in respect of either of the care recipients in question.
The person concerned was notified on 28 October 2015 of these decisions, the reasons for them and of her right of review and appeal.
164. Deputy Robert Troy asked the Tánaiste and Minister for Social Protection if she will ensure a person (details supplied) who is currently suffering with prostate, throat and tonsil cancer receives a decision on an application for invalidity pension without further delay, considering the severity of the person's illness. [39475/15]
View answerInvalidity pension (IP) is a payment for people who are permanently incapable of work because of illness or incapacity and who satisfy the pay related social insurance (PRSI) contribution conditions.
A claim for IP was received from the person concerned on the 16 June 2015. The person concerned was initially refused IP on medical grounds. However, following review, the deciding officer (DO) is satisfied that the medical conditions for the scheme are satisfied.
The person in question has claimed an increase for a qualified adult (IQA). A DO has requested further information from the person in question in order to assess eligibility for an IQA. As soon as this information has been received the claim will be decided as quickly as possible and the person concerned will be notified directly of the outcome.
165. Deputy Seán Ó Fearghaíl asked the Tánaiste and Minister for Social Protection if she will expedite approval of a disability allowance to a person (details supplied) in County Kildare; and if she will make a statement on the matter. [39513/15]
View answerFollowing a review of the entitlement of the person in question, disability allowance (DA) was disallowed with effect from 8 July 2015 as she was deemed to have means in excess of the statutory limit for her circumstances.
Further information was supplied by the person in question with a request to review her entitlement. The deciding officer reviewing this case upheld the decision to disallow payment as means are still in excess of the statutory limit. Notification of this decision issued on 6 November 2015.
The person in question has been advised of her right to appeal this decision to the social welfare appeals office.
166. Deputy Denis Naughten asked the Tánaiste and Minister for Social Protection her plans to provide access to illness benefit payments to the self-employed; and if she will make a statement on the matter. [39518/15]
View answerSelf-employed persons who earn €5,000 or more in a contribution year are liable for PRSI at the class S rate of 4%, subject to a minimum payment of €500, and are entitled to access long-term social insurance benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory) as well as guardians payment (contributory), maternity benefit and adoptive benefit.
The cost of extending certain social insurance benefits, including invalidity pension, was considered in the Actuarial Review of the Social Insurance Fund, as at 31 December 2010. The Review covers a 55 year period and builds on the findings of previous Actuarial Reviews, taking account of the policy, economic and demographic changes with particular reference to income and expenditure projections as well as value for money and break-even contribution rates issues.
The Review found that the self-employed achieve better value for money compared to the employed when the comparison includes both employer and employee contributions in respect of the employed person. The report also found that the effective annual rate of contribution, or the required contribution as a percentage of salary, needed to provide the core full-rate State pension (contributory), which is the benefit currently available to self-employed contributors, is approximately 15% at national average earnings level. This is compared favourably with the 4% rate currently paid by the self-employed. While the Review did not examine the cost of extending cover for illness benefit to the self-employed it did examine the cost of extending invalidity pension to that group. The Review found that an incremental increase in contribution rates from approximately 15% to approximately 17% would be required.
In June 2011, I established the Advisory Group on Tax and Social Welfare to examine a number of specific issues including the issues involved in providing social insurance cover for the self-employed.
In its 2013 report, the Group found that extending social insurance for the self-employed was warranted in cases related to long term sickness or injuries, through the invalidity pension and the partial capacity benefit schemes. In this regard the Group recommended that the rate of contribution for class S should be increased by at least 1.5 percentage points, payable on a compulsory basis only.
Any changes to the PRSI system for the self-employed would have to be considered in a budgetary context and, in particular, the funding position of additional entitlements.
167. Deputy Joan Collins asked the Tánaiste and Minister for Social Protection her views on correspondence (details supplied) regarding the community employment scheme. [39519/15]
View answerThe person concerned commenced a Community Employment (CE) scheme on 11th October 2010 under the Part-Time Integration (PTI) option. This option caters for persons under 55 years of age who have spent a period of less than 3 years on the Live Register before commencing CE. As set out in the scheme guidelines, this option is a work programme offering eligible participants part-time work and training for one year. Specific progression placement targets are set for participants approved under this option; in certain circumstances some participants may be re-engaged for a consecutive 12 months where this is deemed to further the participant’s employment prospects. Under the PTI option a person may be eligible to participate on CE for a maximum continuous period of 2 years, continued participation being subject to annual approval by the Department. After this 2 year period has elapsed, a person must have spent at least another 12 months on the Live Register before again being eligible to participate on CE.
The maximum period of participation permitted for any person who is under 55 years of age when commencing CE is 3 years. Notwithstanding the eligibility criteria for persons in his circumstances, participation for the person concerned has been approved for a continuous period of over 5 years to date. His previous finish date has already been extended by a further 6 weeks to 6th November 2015 to enable the scheme complete his exit strategy. His participation cannot be extended beyond that date.
168. Deputy Robert Troy asked the Tánaiste and Minister for Social Protection if she will reinstate the telephone allowance in the household benefits package. [39604/15]
View answerThe overall concern of Government in its Budgets has been to protect the primary social welfare rates. Expenditure on pensions at approximately €6.675 billion is the largest block of expenditure in the Department in the Estimate for 2015, representing almost 34.4% of overall expenditure. Because of demographic changes, the Department’s spending on older people is increasing year on year. The Department has had to make provision for an additional €168 million this year for the increasing number of pensioners. Maintaining the rate of the State pension and other core payments is critical in protecting people from poverty.
While the decision to discontinue the telephone allowance was a difficult one it provided annual savings of €48 million and meant that the Department was able to retain the other valuable elements of the household benefits package such as the electricity and gas allowance and the television licence. The Department will spend approx. €227 million this year on these elements of the household benefits package for over 416,000 customers.
I am keenly aware of the impact on the Department’s clients and particularly those who are living alone. In Budget 2016, I was able to announce the first increase in the basic rate of the State pension in seven years, by €3 per week. This will increase the personal rate of the non-contributory pension to €222, and that of the contributory pension to €233.30. I was also pleased to announce a €2.50 increase in the rate of the Fuel Allowance, from €20 to €22.50 per week. I believe that, taken together with other changes, such as increasing the Christmas Bonus to 75% of weekly rate and increasing the Living Alone Allowance in 2015, the impact of this Budget will be very positive for older people.
169. Deputy Willie Penrose asked the Minister for Finance if he will commit to applying the universal social charge to retired public servants on the same basis as currently applies to other retired workers, in the interest of equality of treatment; and if he will make a statement on the matter. [39571/15]
View answerThe USC was introduced in Budget 2011 to replace the Income Levy and Health Levy. It was a necessary measure to widen the tax base, remove poverty traps and maintain revenue to reduce the budget deficit. It is a more sustainable charge than those it replaced, and is applied at a low rate on a wide base.
The USC, like the Income Levy before it, does not apply to social welfare payments, such as the contributory and non-contributory State pensions, or payments of a similar nature. However occupational pensions, including occupational pensions of retired civil servants, are liable to the USC if the payment is greater than the exemption threshold, which for 2015 is €12,012.
As you are aware, delivering on a commitment in the Programme for Government, the USC was reviewed by my Department in the lead up to Budget 2012. The report is available on my Department's website at http://www.finance.gov.ie. The issue of USC applying to occupational pensions of retired public servants who entered the public service before April 1995 was examined as part of that review. Such individuals are (or were) liable to modified rate PRSI, which does not generate an entitlement to the State Pension.
The Government decided not to exempt the occupational pensions of these individuals from the USC charge as it would be very costly and difficult to achieve, and it would involve all income earners with the equivalent income benefitting from the exemption. In addition, it would also undermine the principle of the USC being applied to income with few exceptions.
However, as a result of the review of the USC, the Government decided in Budget 2012 to increase the entry point to the Universal Social Charge from €4,004 to €10,036 per annum. Budget 2015 provided for an increase in the exemption threshold to €12,012 and I announced in my recent Budget speech that this threshold will increase to €13,000 per annum from 1 January 2016. It is estimated that over 700,000 income earners will not be liable to USC at all from next year.
This exemption threshold equalises the position for single individuals whose sole source of income is the State Contributory Pension with Public Service pensioners whose pension is at an equivalent level. Furthermore, I intend to continue to reform the tax system in future budgets, subject to having the required fiscal space.
I would point out that the changes to the income tax system included in Budget 2015 mean that individuals who paid Income Tax and /or USC in 2014, including pensioners, are seeing a reduction in their tax bill this year where incomes are equal. Budget 2016 is now continuing this process of reducing the tax burden on low and middle income earners including, among other changes, a decrease in the three lowest rates of USC announced to take effect from January 2016.
