Dáil Éireann Debate, Thursday - 13 October 2022
39. Deputy Éamon Ó Cuív asked the Minister for Social Protection the rationale behind the method for means testing capital for means-tested social welfare payments; and if she will make a statement on the matter. [50320/22]
View answerThe system of social assistance supports provides payments based on an income need. The means test plays a critical role in determining whether or not an income need arises as a consequence of a particular contingency – such as disability, unemployment or caring. This ensures that the recipient has a verifiable income need and that resources are targeted to those who need them most.
Means tests are kept under regular review and a number of significant changes have been made in recent years. In particular, I have introduced a number of changes to means testing which provide for higher income disregards. These disregards ensure that, where people are in receipt of a social assistance payment and are working, a certain level of income from that work is not assessed in the means test.
A maximum rate is payable where a person has limited or no means, and tapering applies to the rate payable to those with modest or more substantial means. This is because there is an expectation that those with resources can at least partly contribute towards supporting themselves.
Social welfare legislation provides that, for social assistance schemes, income and capital (such as savings, investments and property other than the family home) belonging to the claimant and his or her partner, where applicable, is assessable for means assessment purposes.
How capital is assessed can vary depending on the nature and purpose of the payment, and various disregards apply across the schemes, reducing the amount of means assessed.
For most social assistance schemes, the first €20,000 of capital is fully disregarded, the next €10,000 assessed at €1 per thousand, the next €10,000 assessed at €2 per thousand, with the remainder assessed at €4 per thousand.
For Disability Allowance and Carer’s Allowance, the first €50,000 of capital is fully disregarded. The Disability Allowance capital disregard was increased to €50,000 in 2007 in recognition of the fact that a person who is in receipt of Disability Allowance may not have had the opportunity to accumulate savings and that, in some circumstances, families may wish to make future financial provision for a child or sibling but are concerned that such provision would adversely affect their entitlement to Disability Allowance.
I increased the Carer’s Allowance disregard in Budget 2022 for similar reasons; family carers may decide to provide for the future care of children or adults with disabilities. Increasing the disregard in line with Disability Allowance allows for the planning of future care needs.
Recently, as part of Budget 2023 I introduced significant changes in the means test for Fuel Allowance, including an increase in the overall threshold to €200 over the relevant State Pension (Contributory) rate - an increase of €80 in the allowable means.
Further to this, I made additional targeted changes, in relation to disregarding income from Disablement Benefit and Half Rate Carers allowance, in the means test for Fuel Allowance.
It is estimated that these changes, combined, will help more than 17,000 additional households to qualify for Fuel Allowance next year.
Any changes to the capital disregards would have cost implications and would have to be considered in the overall policy and budgetary context.
