Dáil Éireann Debate, Tuesday - 13 February 2024
436. Deputy Seán Haughey asked the Minister for Social Protection if drawdowns from approved retirement funds can be excluded as means when determining eligibility for the fuel allowance; and if she will make a statement on the matter. [6182/24]
Amharc ar fhreagraThe Fuel Allowance is a payment of €33 per week for 28 weeks (a total of €924 each year) from late September to April, at an estimated cost of €382 million in 2024. The purpose of this payment is to assist these households with their energy costs. Only one allowance is paid per household.
Fuel Allowance operates as part of an overall system of social protection supports which provides assistance payments based on a system of means testing. The means test ensures that the recipient has a verifiable income need and that resources are targeted to those who need them most. By its nature, the means test takes account of the income a person or couple has in terms of cash, property - other than the family home - and capital.
The treatment of Approved Retirement Funds for Fuel Allowance purposes is aligned with the treatment of Approved Retirement Funds for other Departmental means tested schemes. Approved Retirement Funds are similar to funds in a bank account in terms of accessibility. Therefore, the current value of the Approved Retirement Funds is treated as capital for means assessment purposes.
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 that the full amount of the capital is not assessed.
The standard formula for assessing the value of capital for those aged over 70 for Fuel Allowance purposes 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 drawdowns from the fund in the means assessment.
While consideration is always given to any suggested improvements to Department schemes, any decision to amend the Fuel Allowance means test in relation to the treatment of Approved Retirement Funds would have budgetary and scheme consequences and can only be considered while taking account of the overall budgetary context and the availability of financial resources.
I hope this clarifies the matter for the Deputy.
