I understand that the Deputy is concerned, in particular, about the current arrangements applying in the case of old age pensions and other social assistance pensions where the claimant is in possession of a farm. In assessing means for social assistance purposes, account is taken of any cash income the person may have, including income from farming, together with the value of capital and property, except the home.
When assessing means derived from farming, a person is assessed with the prospective income from the farm in the next 12 months. In most cases, the figures for the last 12 months are used for this purpose. However, regard will be taken of any major changes in stock levels or in method of farming or in the prices of farm products. The yearly value or net profit is calculated by deducting all necessary expenses from the gross income. Where land is let on short-term lettings, such as the 11 month system, the income from such lettings is calculated as cash income for the purpose of the means assessment. Again, all necessary expenses incurred by the owner, such as auctioneer fees, fencing or fertilising between lettings are deducted from the gross letting income.
Where land is lying fallow or idle, there are two methods, depending on the circumstances of the individual case, for the assessment of means. If the Department is satisfied that the pension claimant is depriving himself or herself of an income in order to qualify for a pension or a pension at a higher rate than would otherwise be the case, the relevant assessment is the income which would be received, if the land were let. Where the Department is satisfied that this is not the case, the value of the land is obtained from the Valuation Office and is assessed as capital for means purposes.
The recent budget contained a number of important measures which are designed to target resources at particular groups of older people, including the farmers in question. In considering these measures I was anxious to target resources at those who are at the greatest risk of poverty, to encourage saving, and to simplify the system of income support for older people who do not receive contributory pensions, including farmers. Budget 2006 provides for an increase of €16 per week or 9.6% for all non-contributory pensioners, bringing the weekly rate of pension to €182 per week with effect from January. This means that significant progress has been made towards the achievement of the Government's commitment to bring the basic State pension to over €200 per week by 2007. In addition, I increased the fuel allowance by €5 per week, from €9 to €14, and the over 80 allowance by €3.60 to €10. These measures will be of considerable benefit to many thousands of non-contributory pensioners, including many farmers.
On budget day, I was also pleased to announce that I proposed to establish, in September 2006, a standardised State non-contributory pension, replacing the old age pension and, for recipients aged 66 years and over, blind pension, widow/er's pension, one-parent family payment, deserted wife's allowance and prisoner's wife's allowance. All the schemes in question feature a common means disregard of €7.60 per week, which has not increased since the 1970s. The means disregard for the new non-contributory pension will be €20 per week, an increase of €12.40 per week. Over 30,000 pensioners who are currently in receipt of a reduced rate of payment will gain from this change. The increase in the personal rate of payment will be up to €12.50 per week while the qualified adult rate, where applicable, will increase by up to €8.30 per week. This measure, in particular, will benefit all those farmers who are in receipt of an old age non-contributory pension at present.
Furthermore, consequent on the increase in the means disregard to €20 per week, a single person with no other means will be able to have up to €35,000 in capital and still qualify for a pension at the maximum rate. This figure is doubled in the case of a pensioner couple.
By any standards, the levels of increases and revised means test arrangements announced in the budget are exceptional. The proposed modernisation of the current arrangements is also a further demonstration of our commitment to all those who are elderly, including those who continue to farm or lease land.