Dáil Éireann Debate, Tuesday - 12 June 2018
1215. Deputy Peter Burke asked the Minister for Employment Affairs and Social Protection her plans to review the means assessment rules for capital sums held by applicants applying for the State pension (non-contributory) in view of the fact that applicants cannot derive a rate of return from capital sums equal to that of the deemed notional return for assessing capital under the payment; and if she will make a statement on the matter. [24535/18]
Amharc ar fhreagraSocial welfare legislation provides that all income and capital belonging to the claimant and his or her spouse/partner (if applicable) is assessable for means-tested social assistance schemes, with the exception of certain disregards and exclusions provided for in the legislation. The purpose of the means test is to ensure that the State’s resources are directed to those with the most financial need.
The State Pension (non-contributory) means test includes a value attributed to any capital a person may have. Capital refers to savings, investments, shares, cash-on-hands and property (excluding their own home). The value of all of these items is added together and a formula applied to their total value to calculate a person’s weekly means.
Capital is assessed for most social assistance schemes, including the State Pension (non-contributory), using the following formula to establish weekly means:
- Disregard first €20,000 of capital value of property/savings
- Assess next €10,000 @ €1 per €1,000
- Assess next €10,000 @ €2 per €1,000
- Assess remaining capital over €40,000 @ €4 per €1,000.
It should be noted that where capital or property is assessed on this basis, any income received from its use (e.g. interest on savings, dividends from shares, rent from property) is not assessed as cash income.
This capital assessment formula is not intended to determine a potential rate of interest or income from the capital, but rather to ensure that claimants of means-tested social assistance payments, who have more than modest amounts of capital or savings, use at least some of these resources to provide for their financial needs.
Any changes to the current assessment arrangements would have to be considered in a budgetary context.
