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Dáil Éireann díospóireacht -
Thursday, 24 Oct 2002

Vol. 556 No. 2

Written Answers. - Calculation of Capital.

Gay Mitchell

Ceist:

38 Mr. G. Mitchell asked the Minister for Social and Family Affairs if she will amend the formula currently used to calculate the net yearly value of capital, in view of actual interest rates; and if she will make a statement on the matter. [19534/02]

In assessing means for social assistance purposes account is taken of any cash income the person may have, together with the value of capital and property. For the purposes of assessing the value of capital and property a notional assessment method is used. The use of the notional method avoids the necessity of frequent reviews of the entitlements of a very significant number of recipients whenever interest rates fluctuate or whenever the capital is moved from one investment option into another.

The Social Welfare Act, 2000, provided for the introduction of a new assessment method for capital and property which came into effect in October of that year. This new method applies to all social assistance schemes other than supplementary welfare allowance. Under these arrangements the first €12,697.38 of capital is disregarded and the assessment is on a sliding scale for amounts above this. At present, a single pensioner with capital of up to €20,315.80 qualifies for a full pension while a single pensioner with capital of up to €63,486.89 qualifies for a minimum pension.

The new system continued and enhanced the policy of ensuring that those with modest amounts of capital receive the greater share of available support, whereas the small proportion of people with large amounts of capital are assured to be in a position to avail of it to contribute, at least partially, towards meeting their needs. Any changes to the current method of assessment of capital and property would have significant financial implications and could only be considered in a budgetary context.

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