Dáil Éireann díospóireacht -
Wednesday, 26 Nov 1997

Vol. 483 No. 4

Written Answers. - Social Welfare Benefits.

Brendan Howlin

Ceist:

36 Mr. Howlin asked the Minister for Social, Community and Family Affairs if he will review the regulations regarding the assessment of capital for means for social welfare payments in particular old age non contributory pensions. [20548/97]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

Over the years different methods of assessing the value of capital have been applied to the various social assistance schemes. However, more recently the process of standardising the assessment of capital across the different social assistance schemes has been initiated, so as to improve the equity of the system. The introduction of disability allowance scheme in October 1996 and the one-parent family payment scheme in January 1997 presented the opportunity to commence this process. Under the new assessment provisions, the first £2,000 of capital is disregarded, the next £20,000 is assessed at 7.5 per cent of the capital value and the balance is assessed at 15 per cent.

I am pleased to inform the Deputy that the Social Welfare Act, 1997, provided for a further extension of the revised capital assessment provisions to the old age (non-contributory) pension, widow's and widower's (non-contributory) pension, orphan's (non-contributory) pension, carer's allowance and pre-retirement allowance schemes, with effect from 17 October 1997. The revised capital assessment provisions are of benefit to the majority of social assistance recipients who have capital. For example, a single old age pensioner can now have capital of up to £6,160 and still qualify for the maximum rate of old age (non-contributory) pension — an increase of £3,173 on the previous arrangements. A married couple can have capital of up to £12,320 and still qualify for the maximum pension — an increase of £6,345. A single pensioner can have up to £35,575 and still qualify for the minimum rate of pension, while a married couple can have up to £71,146 before losing entitlement to the pension.

In addition, the effective assessment rates of capital have been lowered for most recipients with capital. For example, under the former arrangements the effective assessment rate for all levels of capital for old age (non-contributory) pension purposes were approximately 10 per cent in the case of single people and 5 per cent for a married couple. Under the new procedures, capital of up to £20,000 is now assessed progressively up to a rate of 6.75 per cent in the case of a single pensioner and up to a rate of 3 per cent in the case of a married pensioner couple. As only about 2 per cent of single old age pensioners and 4 per cent of married pensioners have capital in excess of £20,000, the new arrangements have improved the income position of the vast majority of old age pensioners. The question of extending the new capital assessment procedures to the other social assistance payments, i.e. unemployment assistance and supplementary welfare allowance, is being examined in a budgetary context, in the light of available resources and other priorities.