Written Answers. - Currency Fluctuations.
Austin Deasy
Ceist:
18
Mr. Deasy
asked the
Minister for Social Welfare
if he will have arrangements made for the immediate re-assessment of means of persons in receipt of British pensions who have suffered a loss in income as a result of the present exchange rate difficulties; and if he will make a statement on the matter.
Bernard Allen
Ceist:
25
Mr. Allen
asked the
Minister for Social Welfare
if he will take into account expenses such as the conversion of sterling to Irish punts when assessing a claimant's means for old age non-contributory pension purposes when such applicants are in receipt of British pensions paid in sterling.
Michael Moynihan
Ceist:
108
Mr. Moynihan
asked the
Minister for Social Welfare
if, in view of the very substantial loss of income in respect of British retirement pensions paid to Irish citizens, he will now arrange for the immediate re-assessment of all non-contributory widows' pensions and non-contributory old age pensions, in respect of which British retirement pensions have been assessed as income.
I propose to take Questions Nos. 18, 25 and 108 together. I understand that the Deputies are concerned about fluctuations in the Sterling/Punt exchange rate and the adverse effects which this might have on British pensions which are assessed as means for old age non-contributory and widow's non-contributory pension purposes.
In assessing an applicant's means, account must be taken of any income which he or she receives, including income from outside the State, for example a British pension. In calculating the means, any such income the applicant receives must first be converted to Irish Punts.
Even within the EC Exchange Rate Mechanism, there are frequent and sometimes wide fluctuations in EC exchange rates. It would not be fair or equitable to pensioners to calculate their means based upon the rate of exchange prevailing at the particular date an old age non-contributory pension or a widow's non-contributory pension application is made. Nor would it be administratively possible to anticipate any future fluctuations in exchange rates with any degree of accuracy. In order to reflect a reasonable pattern of exchange rates, an average exchange rate system is used for converting EC pensions to Irish Punts. For this purpose, my Department use figures of average exchange rates for each EC currency, which are provided by the Administrative Commission of European Communities on Social Security and Migrant Workers. These are published quarterly by the Commission in the Official Journal of the European Communities.
For pension means assessment purposes, the Sterling/Punt exchange rate used is the average of the daily exchange rates in the first month of the previous quarter. This rate is then applied to all new pension claims made throughout the succeeding quarter.
Some people who are in receipt of British pensions and who apply for or are currently receiving an old age non-contributory pension or a widow's non-contributory pension may feel that their means should be reduced in the light of recent movements in sterling/punt exchange rates. However, the average exchange rate basis used by my Department avoids the need for frequent reviews of existing entitlements. It also gives an important degree of security to persons who qualify for pension by protecting them to a large extent from short term adverse movements in exchange rates.
Having said that, it is open to any existing pensioner to request a review of his or her means assessment at any time. My Department will employ the appropriate exchange rates in reviewing the means assessment, using the method I have just outlined. If current significant sterling/punt exchange rate fluctuations persist, then these will be reflected in the average exchange rate used for the purposes of means assessments during the quarter commencing January 1993. Pensioners should also notify my Department of any increase in their means, for example if their British pension is increased, as the current level of all a pensioners means must be taken into account when a reassessment is carried out.
Deputy Allen may also have in mind the separate question of bank transaction charges for sterling pension conversion to Irish punts. Between 60 per cent and 65 per cent of all recipients of British retirement pensions who are resident in Ireland have their UK pensions paid directly into their Irish bank accounts. My Department has been in contact with the four major banks in regard to transaction charges for converting British retirement pension payments to punts. Each has confirmed that no transaction charges are applied to persons over 66 years of age provided their bank accounts are kept in credit.
Under existing social welfare legislation, there is no provision for allowing transaction charges relating to currency conversion which may be levied by financial institutions to be offset against a person's means for the purposes of determining entitlement to any of the means-tested schemes of my Department. Given that the main Irish banks do not levy a charge generally on pensioners in these circumstances, I do not see a need at this time to amend the legislation to allow for any such bank charges in making pension means assessments.
If the Deputies will let me have details of any particular cases which they have in mind, I will arrange to have the circumstances investigated.
