In assessing means for social assistance purposes, including the State pension non-contributory, account is taken of any cash income the person may have, together with the value of capital and property (except the home). 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.
Money invested in a bank, building society etc.
The source of any capital held by a pensioner can vary. For example, it can include savings from income while formerly working, savings derived from the sale of property or other assets, savings from occupational or social welfare pension, gifts, inheritances, accumulated interest or dividends or a combination of these. Therefore, in determining a pensioner's means, it would not be possible or practical to distinguish savings derived from particular sources. For this reason, savings from all sources are taken into account in assessing means.
It is recognised that some pensioners may wish to save some element of their non-contributory pension or may have accumulated savings in the past. Accordingly, the current assessment arrangements provide for a disregard of an initial amount of capital. In the case of a single pensioner, the first €20,000 of capital is disregarded and the balance is assessed by reference to a formula. In the case of a couple, the amount disregarded is €40,000. In addition, the first €30 per week of weekly means from all sources including capital does not affect the rate of pension payable.
Accordingly, a single pensioner who has no other means can have capital of up to €40,000 and qualify for a pension at the maximum rate. Where the savings exceed this amount but are less than €94,000, a reduced rate of pension is payable on a sliding scale. These amounts are double in the case of a couple at €80,000 and €188,000, respectively. These means testing arrangements seek to strike a balance between the need to focus scarce Exchequer resources on those who need them most while also encouraging people to save. Any change to the current capital assessment arrangements would have to be considered in a Budgetary context and in the light of available resources.