Dáil Éireann Debate, Thursday - 14 July 2022
144. Deputy Pauline Tully asked the Minister for Social Protection if she will review the means test for the disability allowance and carer’s allowance with a view to assessing income on its net rather than gross value; and if she will make a statement on the matter. [34911/22]
View answerSocial welfare legislation provides that means tests take account of the income and assets of the person (and their spouse or partner, if applicable) applying for the relevant scheme. The means assessment includes income from employment, self-employment, occupational pensions and maintenance payments. It also includes property owned other than the family home and capital such as savings, shares, and other investments.
Following the improvements made in Budget 2022, income disregards for Carer’s Allowance are €350 per week for a single person and €750 per week for a couple. These are the highest weekly income disregards within the social protection system. After the disregards are applied, the vast majority of Carer’s Allowance recipients are assessed with no means and receive the full rate of payment.
In the case of Disability Allowance, a claimant can work and earn up to €140 a week without their Disability Allowance payment being affected. If a claimant earns more than €140 a week, 50% of their earnings between €140 and €375 will not be taken into account in the Disability Allowance means test.
If net rather than gross income was assessed for Carer's Allowance or Disability Allowance, it would mean that changes in tax rates or tax reliefs could change the claimant’s rate of Carer’s Allowance and significantly increase the complexity of the means assessment and inevitably prolong the assessment process.
People pay varying amounts of tax depending on their level of earnings and personal circumstances. Allowing taxation as a deduction in the means test could mean that the social welfare system, in effect, refunds a person's tax liability. Also, a person may see the benefit of a reduction in their tax bill, which would increase their net pay, eroded through an associated reduction in their social welfare payment.
It would also have significant budgetary implications and would give rise to inconsistencies in how means tests are applied across schemes.
I trust this clarifies the position for the Deputy.
