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. The means assessment includes income from sources such as employment, self-employment, occupational pensions and maintenance payments. It also includes 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.
In the case of the means assessment for a personal rate of the State Pension (Non-contributory), the first €20,000 (€40,000 for a couple) of capital an applicant holds 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 in this regard would have to be considered in the overall policy context.
I trust this clarifies the matter for the Deputy.
