Dáil Éireann díospóireacht -
Tuesday, 24 Mar 1992

Vol. 417 No. 5

Written Answers. - Means Testing for Pensions.

Eric J. Byrne

Ceist:

422 Mr. Byrne asked the Minister for Social Welfare if he will outline the method of means testing persons for old age non-contributory pensions and widow's non-contributory pensions; and the amount in savings a 66-year-old non-contributory pension/widow's non-contributory pensioner is allowed without receiving reduced benefits.

Minister for Social Welfare (Mr. McCreevy)

The rules for assessing means for old age and widow's non-contributory pension purposes are set out in detail in the Third Schedule to the Social Welfare (Consolidation) Act, 1981.

The means assessable for both types of pension include cash income, savings and investments and any property owned by applicants (but excluding their principal residence).

In assessing means, the amount of any investments and property is added to cash on hands and money in savings or current accounts. The following formula (as provided for in the Third Schedule to the 1981 Act) is then used to work out the net yearly value of this aggregated capital.

Formula for assessing capital

Scheme	Initial disregard	Assessment
Old Age Non-Contributory Pension
Single person	£200	5 per cent of next £37510 per cent of balance
Married couple	£400	5 per cent of next £75010 per cent of balance
Widow's Non-Contributory Pension	£200 plus £100 for each-dependant child	5 per cent of balance

The resulting net yearly value of capital is added to any other direct income or earnings the pensioner may expect to receive during the coming year. Where an old age pensioner is married, the means of both spouses are assessed, and each spouse is assumed to have half of the means of the couple. The resulting aggregate amount is divided by 52, and £1 is added, to derive the weekly means.

Weekly means up to £6 gives entitlement to the maximum rate of old age or widow's pension, which is currently £55 a week (increasing to £57.20 from the end of July 1992). Pension is reduced by £2 for each £2 of weekly means above £6. Weekly means up to and including £58 gives entitlement or a minimum-rate pension of £3 a week.

The maximum amount of savings (assuming no other means) which an old age pensioner or widow may have without receiving reduced pension is £2,987.50 in the case a single old age pensioner, £5,975 in the case of a married couple one of whom is a pensioner, and £5,400 in the case of a widow.