JOINT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS díospóireacht -
Tuesday, 2 Dec 2003

Vol. 1 No. 16

Qualified Adult Allowance: Presentation.

Chairman

I welcome Mr. Farrelly and Mr.Coleman of Dún Laoghaire-Rathdown division, though I know they represent a broader group in the Irish Senior Citizens Parliament. We have the submission on the qualified adult allowance and I know the delegation want to discuss a particular net issue in that regard. The submission is concise and to the point. One delegate can make a presentation and the committee members will ask questions.

Members are reminded of the parliamentary practice that they should not comment on, criticise or make charges against any person outside the House, or an official, either by name or in such a way as to make him or her identifiable. Members wishing to make a declaration in relation to any matter being discussed may do so now or at the beginning of their contributions. Members are also reminded that if there is the possibility of a conflict of interest they should make a declaration of their interests now or at the beginning of their contribution. I draw witnesses' attention to the fact that while members of the committee have absolute privilege, that privilege does not extend to witnesses appearing before the committee. While it is generally accepted that qualified privilege would apply to witnesses, the committee cannot guarantee any level of privilege to any witnesses appearing before it. That is normal housekeeping for us but I anticipate no difficulties with the witnesses.

Mr. Frank Farrelly

Briefly, we feel it is an anomaly that a housewife, with no means of her own, is deemed to own half of her husband's lump sum because it is invested in a joint account for ease of withdrawal and purely for that purpose. This has resulted in women being deprived of the qualified adult allowance. I am referring to women who remained at home to look after their families or who were forced to resign their jobs on marriage. We are not concerned with those who have assets in their own right. We hope the committee will support our call for a change in this regard in order that women would not be deemed to own half of this money. This is an accounting practice for ease of withdrawal in the event of the death or incapacity of the other party. It is not a question of ownership.

Mr. Mark Coleman

To expand on that, the focus is on contributory retirement or old age pensioners and, within that, the qualified adult allowance. Within that again, the focus is on the ability of the pensioner to have a substantial deposit in the first place. It is where the deposit comes from that is crucial. It is almost certain that a pensioner having a substantial amount on deposit would have that sum in severance, redundancy or early retirement. That would be in lieu of wages forgone. The lump sum would also be subject to the provisions of the Revenue and tax authorities. Therefore, it is compensation for leaving revenue-earning work early. For his own concern, and in keeping with the philosophy of the Government of having property in joint ownership, particularly the house, the money is put in a joint deposit account. It is only by default that it has come to our attention that in doing so a pensioner imposes a double penalty on himself. We feel this is anomalous and we seek the committee's support in having it remedied.

Mr. Dick Fitzpatrick

It would be quite easy to find out where such money comes from. There is no question of it coming from spurious grounds; it would be from redundancy or pension provisions. It would relate to employment and even if the person did not retain such information it would be easy to find.

Deputy Ring

I welcome the delegation and I compliment them on being brief and to the point. I have spoken in the past and will speak in future about women who chose to remain at home.

This would not be a means-tested payment. Those on these pensions will have worked and their wives are qualifying adults getting an allowance. It upsets women that they do not have a pension in their own right, though the programme for Government has a commitment to that effect. I hope the Government honours that commitment and, perhaps, we will see something about it tomorrow.

On the issue raised by the delegation, it is correct. If one gets a lump sum it is something one has worked for. One wants to make it available to one's wife, as is right, as one does not know the day nor the hour when she might need money in the short-term. That is why most couples have a joint account and it is wrong to penalise the husband for this. As the delegation put it, it is payment for work that has been done and it should not be taken as income. It would be different if it were inherited but it is money that was earned and is paid along with the pension. The dues were paid to the State and we must take this up with the Minister and have it rectified. Not many people will be affected and the group has the support of my party. However, I listen to women every day and they feel they are not valued for the work they do at home.

We are supposed to be a nation that protects the family and the Constitution is all about the family. However, successive Governments have not helped the family, which is wrong. I hope this is dealt with tomorrow and, if not, it is the duty of the committee to deal with it. I will take it up with the Minister as it is wrong and must be addressed.

Deputy S. Ryan

I apologise for being late for the presentation but I have read it. I compliment the organisation on its submission on behalf of older people. There is an anomaly here. Various anomalies have been brought forward over the years and it has taken organisations like this to keep chipping away at them to get a resolution of them. Having looked at the position and listened to the organisation's contribution, there are sound grounds for saying to the Department that its interpretation is wrong and it should look at it in the different way.

Obviously there will not be movement on the issue in the budget tomorrow. Considering the attitude of the Department over the years, we will face a battle on this issue. With the Labour Party, apart altogether from the committee, I will pursue this issue vigorously. It is not until anomalous situations like this are brought to our attention that we hone in on them.

In this case a person is being discriminated against in many ways. I compliment the delegation again and assure them of my support and that of the Labour Party in pursuing this and trying to get a satisfactory solution.

Deputy Carty

I join my colleagues in welcoming the delegation to the committee and thank it for its brief presentation. There is an anomaly and I fully support what Deputy Ryan said, that the committee should forward this to the Minister and have it changed. I hope tomorrow will see the beginning of a change in this regard. When the payments that have gone into the bank have been cleared, I cannot understand why this anomaly should arise. It is an oversight and the committee will try to have it rectified.

Deputy Connolly

In a previous life, I was involved in the setting up of a retired staff association in St. Davnet's Hospital and I know a person who may be a member of the organisation's committee. At the time, 14 years ago, a person asked why we had an interest in retired staff and I answered that we will retire shortly. It comes faster than one imagines.

I want to reassure the delegation. Its submission is brief and clear, but it carries a major message. It is great to see the matter put in a brief and effective submission. I support this submission. There is a danger that if this is not addressed, it could lead to bad practice. Some guy will get his little golden nest egg and say, "Look what will happen to you down the road; I will put this in my name." There are many inherent dangers in that regard if this is not addressed.

The committee sees that there is a way around this problem. It is a small matter of recognition. The building societies, according to the organisation's submission, recognise the first name on a joint account as the sole owner of the account, yet the other person has total rights to it and it is a separate account for all other purposes. Where a wife or husband is the breadwinner and the partner is the dependant, the problem is not impossible to rectify. If the red tape is cleared, it should not be difficult to sort out.

Deputy D. Wallace

I also welcome the representatives of the Irish Senior Citizens Parliament. We would be very pleased if every deputation was as brief in making a case and I congratulate the deputation. They highlighted an anomaly that should be removed. Over the years we have been dealing with social welfare issues. It is only when matters are brought to one's attention that one sees an anomaly. Often the Department does not realise the impediments it puts in people's way. I would be very confident that the members of the committee will be unanimous in their support to have this anomaly removed. The deputation gives clear examples of similar situations and I hope our representations will be successful.

Senator K. Walsh

I congratulate the three gentlemen on their presentation and add my voice of support to those of my colleagues.

Deputy Callanan

I have one question. Is it the interest on the money that is put against it or is it the capital?

Mr. Coleman

It is the capital sum invested in joint accounts, which is deemed to be half owned by the wife. The interest is obviously subject to DIRT, etc., and there is no problem with that aspect of it. It is the fact that the lump sum, which was initially intended to provide a nest egg against future earnings, should be deemed to be half owned by the wife as a result of which she fails to qualify for the qualified adult allowance.

Deputy Carty

Is it that if one put the money in one's own name, it would not have any effect?

Mr. Coleman

It would not affect the qualified adult allowance but it would enormously complicate affairs on the death of the pensioner and access by the wife to the account.

Deputy Ring

That was the point I was going to make, that it is wrong that this is discrimination against women. That is the issue. The Minister is a woman and I hope she will deal with this.

Deputy Carty will be aware that the local authorities also discriminate against the elderly with contributory pensions in the case of the bin charges where the same problem arises. If one gets the contributory pension in my county one must pay the bin charges but if one is the recipient of a non-contributory pension, one does not have to do so in that one gets a waiver. That is wrong.

These are the people who have worked and brought the country to where it is today. They have worked every day of their lives. They have qualified for their pensions. They are the ones who should get any break that is coming.

Chairman

Do any members of the delegation wish to comment?

Mr. Farrelly

I thank the committee for giving us a hearing and for this support. We hope that change follows.

Chairman

I thank the delegation for coming before the committee and making such a concise but telling contribution. The delegation notified the committee in writing prior to the meeting about the issue of the impact of joint accounts on the entitlement to qualified adult allowance for contributory old age pensions. It is a narrow and clearly identifiable category of people and does not open the floodgates. The origins of the sums involved can be clearly identified and that is crucial to the matter. That should lend itself favourably to a positive view from the Department of Social and Family Affairs which is probably concerned about closing one anomaly and correspondingly opens another. The source is easy to identify.

As my colleagues stated, many people who have worked hard over the years now find themselves in this position. As a member of the legal profession, I would be very concerned that people would feel compelled to open an individual account which could cause significant problems later from the point of view of inheritance, particularly from that of the surviving spouse. We would have to be very careful in that context to ensure that this issue is taken into account on a reasonable basis and the committee will urge the Minister to do so. To that end, the joint committee will send a letter to the Minister asking that she consider this anomaly in the context of the forthcoming measures as soon as possible. There are only 24 hours before the budget and we hope this request is not late. We hope that in time the Minister will take the necessary steps to deal with this anomaly which has been highlighted by the delegation. I thank the delegation for appearing before the committee. The concise nature and detail of the submission has made a major impression.

The joint committee will meet tomorrow at 10 a.m. As the NGOs will be represented by three speakers we will have concise contributions. Today's presentation was very clear and useful. There is an anomaly and we will ask the clerk to formulate a letter outlining it to the Minister.

Deputy S. Ryan

Will that be done on behalf of the committee?

Chairman

Yes, it will express the unanimous view of the committee.

Deputy S. Ryan

Are we to leave it at that and not make individual representations?

Chairman

Yes, it will be done on behalf of the committee. If we get a reply it will be forwarded to all committee members who can then communicate their views to us on the matter.

The joint committee adjourned at 2.30 p.m. until 10 a.m. on Wednesday, 3 December 2003.