Richard Bruton
Ceist:166. Deputy Richard Bruton asked the Minister for Social Protection if the criteria for assessment of savings needs to be updated; and if she will make a statement on the matter. [34937/22]
Amharc ar fhreagraThursday, 14 July 2022
Ceisteanna (166)
Freagraí scríofa
Social welfare legislation provides that means tests take account of the income and assets of the person (and their spouse or partner, if applicable) applying for the relevant scheme. Income and assets include income from employment, self-employment, occupational pensions, maintenance payments as well as property owned (other than the family home) and capital such as savings, shares, and other investments.
The assessment of capital reflects an expectation that people with reasonable amounts of capital and property are in a position to use that capital, or to realise the value of the property, to support themselves without having to rely solely on a means-tested welfare payment.
While savings are assessed in the means test, most social protection schemes have a general capital disregard meaning the full amount of the capital is not assessed.
The standard formula for assessing the value of capital for most social welfare payments is as follows: the first €20,000 is fully disregarded; the next €10,000 is assessed at €1 per thousand, the next €10,000 is assessed at €2 per thousand, with the remainder assessed at €4 per thousand.
As part of Budget 2022, the capital disregard for Carer’s Allowance was increased to €50,000, bringing it into line with the capital disregard for Disability Allowance. The new formula is as follows: the first €50,000 is fully disregarded; the next €10,000 is assessed at €1 per thousand, the next €10,000 is assessed at €2 per thousand, with the remainder assessed at €4 per thousand.
The capital assessment formula is not designed to reflect interest or annuity rates available to investors and no account is taken of interest or dividend payments received in the means assessment.
Any changes to the means assessment formula for social assistance schemes would have to be considered in the overall policy and budgetary context.
I trust this clarifies the position for the Deputy.