Dáil Éireann Debate, Wednesday - 10 November 2004
68 Mr. Penrose asked the Minister for Social and Family Affairs if special savings incentive accounts of social welfare recipients will not be included in assessment for social welfare payments when such accounts matures; and if he will make a statement on the matter. [28258/04]
Amharc ar fhreagraI have recently asked my Department to carry out a comprehensive examination of the current arrangements for assessment of capital, particularly in so far as they apply to SSIAs, and I will consider what action needs to be taken on foot of it. I expect that this examination will be concluded in the near future.
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. Capital may include the following: stocks and shares of every description, which are assessed according to their current market value, savings certificates-bonds, national instalment savings, which are assessed according to their current market value, and money invested in a bank, building society and so on. Amounts held in SSIAs are treated in the same manner as the other capital I have just outlined, subject to the examination.
It is important to note that in assessing the value of capital, significant disregards are applied. The first €12,697.38 of capital is disregarded and the assessment is on a sliding scale for amounts above this sum. In the case of the old age pension, for example, 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 €68,565.84 qualifies for a minimum pension. These amounts are doubled in the case of married pensioners.
The current system continues 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 assumed to be in a position to avail of it to contribute, at least partially, towards meeting their needs.
As already stated, I will consider in the near future the position of moneys held in SSIA accounts. I will bring the outcome of that examination to the Government as soon as possible.
I appreciate that the Minister is carrying out a review and acting quickly in this instance. Is he in a position to indicate how many may be affected? I suggest the number of social welfare recipients investing in SSIAs is small. Does the Minister agree that some who were in employment and invested in SSIAs for two or three years and who have since left the labour force or retired would suffer? Does he agree that many social welfare recipients would not have much to invest? Even at a minimum of €63 per week, some were putting it by to help educate grandchildren. Does the Minister agree that if a person in receipt of a non-contributory pension which is means-tested had €15,000 or €16,000 and invested the minimum of €63 per month over the five years, this would put him or her in a position whereby he or she would lose some of the pension? Would it not be a travesty that people who may have put away small amounts for the future would jeopardise their mean-tested welfare payments down the road? Does he agree it is contrary to the spirit of the once-off scheme that social welfare recipients should have their social welfare payments affected in an adverse manner by a scheme advocated by the Government as a giveaway?
I thank the Deputy and his colleague, Deputy Lynch, who raised the matter with me, as a result of which I asked for an examination. I have indicated I am sympathetic to a change. There are a number of issues I have to consider. It would probably be the first time we distinguished between the different forms of capital. One may be saying to a person who has savings certificates, money invested in a building society or in a credit union or ordinary savings in their bank account that their money is not as important as that in an SSIA because the Government promoted it. That message would form one complication. If a decision were taken to exempt SSIAs from the assessment, what does one say to a person who does not like SSIAs and has saved his hard-earned few bob in the credit union? Those are issues I must consider. At the same time it is a once-off scheme promoted by the Government and that too has merit.
It does not affect a large number of social welfare recipients. Perhaps 12,000 to 15,000 would be within the thresholds. We have no way of knowing how many of those would have SSIAs. The Deputy could try calculating how many of the 15,000 within the threshold would have SSIAs. Given that fewer than half of those may have SSIAs, we are talking about a few thousand people. It is probable that it would not be enormously expensive to deal with it, but there is the issue of distinguishing between different types of capital. This disregard is quite high. In the case of an old age pension, for example, a single pensioner with capital of up to €20,000 qualifies for a full pension while a single pensioner with capital of up to €68,000 qualifies for a minimum pension. These amounts are doubled in the case of married pensioners.
There are issues involved. I am sympathetic to this case because the Government promoted SSIAs. When funds are available, the question must be asked whether one targets them towards those who were energetic enough to invest in SSIAs or spreads the available funds on the basis of whether one has capital, be it in a credit union or in an SSIA, and that a pound is a pound wherever one saves it. Those are the issues I must consider before coming to a conclusion.
