Jack Wall
Ceist:166 Mr. Wall asked the Minister for Social, Community and Family Affairs the plans, if any, he has to change the regulations of carer's allowance payments to ensure that they are not means tested. [16862/99]
Vol. 507 No. 3
166 Mr. Wall asked the Minister for Social, Community and Family Affairs the plans, if any, he has to change the regulations of carer's allowance payments to ensure that they are not means tested. [16862/99]
The carer's allowance is a social assistance payment to carers on low incomes who live with and look after certain people who need full-time care and attention. At the end of March 1999 there were 11,659 carers in receipt of the carer's allowance. The estimated expenditure on carer's allowance in 1999 is over £59.5 million.
Following a detailed examination of the review of the carer's allowance, which was launched in October 1998, and its proposals on the improvement and development of the carer's allowance, arange of measures were introduced in the 1999 budget at an additional annual cost of over £18 million, to improve and develop the position of carers, that is, over 40 per cent increase in funding in one year.
The changes introduced in the 1999 budget included some improvements in the means test for carer's allowance. From August 1999, a disregard of £75 per week will be applied to the income of a single carer and the current disregard of £150 per week will be applied to the joint means of a married couple.
The submissions and proposals of all organisations representing carers were considered as part of the review process and are comprehensively addressed in the report. One of the major issues raised by these groups was the removal or easing of the carer's allowance means test.
The review examined the means test and considered that it should be maintained as a way of targeting scarce public resources towards those who are most in need. The means test which applies to the carer's allowance is one of the more generous tests associated with social welfare schemes. The position will be kept under review.
167 Mr. Gilmore asked the Minister for Social, Community and Family Affairs the notional rate of interest applied to savings by his Department when assessing the means of an applicant for old age contributory pension; when this rate was fixed by his Department; his views on whether this rate is fair in view of the collapse in the value of savings which elderly people have due to the very low interest which can be earned on these small scale savings; and if he will make a statement on the matter. [16863/99]
Entitlement to the old age contributory pension (OACP) is determined by reference to the level of PRSI contributions that claimants have throughout their working lives and is not affected by the claimant's means. However, where a person has not paid PRSI contributions or has insufficient PRSI contributions to qualify for OACP, they may apply for the means-tested old age non-contributory pension.
The purpose of the means test is to ensure that the limited resources available are directed at those most in need. Accordingly, in assessing means, account is taken of any cash income the person may have, for example, earnings from employment or self-employment, together with the value of any capital or property owned.
As there are substantial numbers of people in receipt of weekly social assistance payments, it would not be feasible to assess means from capital on the basis of actual returns from investments. This would necessitate frequent reviews of the entitlements of a very significant number of recipients whenever interest rates fluctuated or whenever the capital was moved from one investment option into another. For this reason a notional value is ascribed to the capital owned.
Under the current arrangements for assessing capital and property the first £2,000 is disregarded, the next £20,000 is assessed at 7.5 per cent and the balance is assessed at 15 per cent. These arrangements, which were provided for by my predecessor, applied to old age non-contributory pensions with effect from October 1997.
While the formula for the notional assessment of capital includes rates of 7.5 per cent and 15 per cent, the actual effective assessment rates are much lower. For example, a single pensioner can have capital of up to £6,160 and a couple can have capital of up to £12,320 and still qualify for the maximum rate of old age non-contributory pension. In addition, a couple with capital of £20,000 would only be assessed with means of £600, giving an effective assessment rate of just 3 per cent. As only 2 to 4 per cent of pensioners have capital in excess of £20,000, this means that the effective assessment rates for the vast majority of pensioners are very much lower than the 7.5 per cent and 15 per cent rates which are used in the notional assessment formula.
The current formula which is used to determine the value of capital or property disregards a certain amount of capital from the assessment in recognition of sudden and unforeseen needs which may arise; attributes a value to the potential investment income which the capital or property is capable of generating; and recognises that, in addition to the value of the income which the capital or property is capable of generating, there is a further benefit to the claimant through the possession of that capital or property.
168 Mr. J. O'Keeffe asked the Minister for Social, Community and Family Affairs the cost of the free telephone allowance scheme; and the estimated additional cost of extending the scheme to all old aged pensioners. [16922/99]
The free telephone rental allowance is available to people, usually aged 66 or over, who are in receipt of a welfare type payment and who are either living alone or with certain categories of people, e.g. dependent children or a person with a disability. This condition is not, however, applied in the case of persons over age 75 who are in receipt of a qualifying payment.
The cost of the free telephone rental allowance in 1998 was £28,940,000. The estimated additional cost of extending the scheme to all old age contributory and non-contributory and retirement pensioners is £25 million.
169 Mr. N. Ahern asked the Minister for Social, Community and Family Affairs the cost of giving all women back credits for the years they stayed at home minding children, for example under 12 years; the examination, if any, carried out into this area; the number of women on a social welfare payment; and the number not on a social welfare payment who would qualify for a payment or larger payment if this was implemented; and if he will make a statement on the matter. [16951/99]
The Government recognises that women who leave the workforce to undertake family responsibilities in the home face difficulties in maintaining their social insurance record and has given a commitment under An Action Programme for the Millennium "to provide the mechanism to allow women, who take time out for family reasons, to continue contributions for pension purposes".