Joint Committee on Social Protection, Community and Rural Development, and the Islands publishes report on Means Testing in the Social Welfare System in Ireland

Read the report and its recommendations in full here. 

The Committee identified in late 2023, that the Means Test in the Irish Social Welfare system was in need of review, reconsideration, and possible alteration.

The purpose of this report is to provide a comprehensive examination of means testing within the Irish Social Welfare system, focusing on four key areas: the State Pension, Farm Assist, Carer’s Allowance and Disability Allowance.

These schemes play a crucial role in supporting some of the most vulnerable groups in our society, yet the current means testing framework often presents challenges in ensuring fair access and adequate support. This report aims to highlight these challenges and propose actionable recommendations to the Minister for Social Protection to enhance the equity, efficiency, and transparency of these vital supports.

Speaking on the report, Committee Cathaoirleach Deputy Denis Naughten said: “The Committee has undertaken an in-depth analysis of the existing means testing criteria across various social welfare schemes, and we believe that reforms are necessary to ensure that these supports reach those who need them most.”

“In its scrutiny of Means testing in the Social Welfare System in Ireland, the Committee held meetings with Officials from the Department of Social Protection, representatives from Family Carers Ireland, Age Action Ireland, Alone, Irish Senior Citizens Parliament, Irish Natura and Hill Farmers Association, Irish Farmers Association, Irish Creamery Milk Suppliers Association, Irish Cattle and Sheep Farmers Association, Care Alliance Ireland, Home and Community Care Ireland, One Family Ireland, Disability Federation of Ireland and the Resolution Foundation, and Academics from Maynooth University, Universities of York, Oxford and Bath. The Committee appointed Deputy Éamon Ó Cuív as rapporteur to deliver this report, which includes a number of productive recommendations for the Department to take on board.”

Deputy Éamon Ó Cuív said: “It was a great honour to me to be asked to act as rapporteur of the investigation and report into Means Testing in the Social Welfare System by the Joint Committee. I first became interested in this whole subject when I moved to Connemara in the west of Ireland as a community development co-operative manager. I found in my work that means testing was holding back what was a mainly farming area from developing. I was particularly shocked to find out how unfair and penal the rules were. There have been some improvements in the system since but as the report clearly shows there are still serious issued to be addressed with the various schemes and the way that means are assessed is often very severe, being still a 100% of all increases in income in some instances.

“The report sets out 24 recommendations based on both long-term goals as well as the first steps that should be taken to achieve these goals. I wish to highlight the Committee’s immediate recommendation that all earned income whether self-employed income or employment income should be treated the same, which is not the case at present.”

“Amongst the long-term goals are a radical reassessment of how “capital and savings” are assessed as well as a recommendation that “cliff edges” should be avoided and that means should not be assessed at more than 30% of its value to encourage economic activity and reward endeavour.

“The issue of inheritances by people with life-long disabilities is also addressed as is the issues of the means-test of the Increase for a Qualified Adult (IQA) for people in receipt of a contributory state pension, which the Joint Committee recommends should be abolished incrementally.”

“It is hoped that this practical report will be seen an important input into the reform of “Means Testing” of Social Welfare payments that would affect positively so many dependent on means tested support from the State and also compliment the work instituted by the Minister of Social Protection on this subject within her Department,” Deputy Ó Cuív concluded.

The 24 recommendations are outlined below:

1. Two years ago, the Department of Social Protection instituted a review of means testing, no report has yet been published. The Committee recommends that the Minister immediately publish the report on means testing commissioned by them.

2. The Committee recommends that the Department ensure that any disregards, means testing and income thresholds for secondary benefits including Back to School Clothing and Footwear Allowance, National Childcare Scheme, are automatically raised in line with any core social welfare payment and/or the National Minimum Wage increase.

3. The Committee recommends the simplification and streamlining of the means testing process and that if an individual completes a means test for one payment, their information can be used by the Department if means testing is required for another payment.

4. The Committee recommends that people aged above 66 would not be subject to periodic means testing unless there is reason to believe that there has been a significant change to their income or if it has been requested by the individual.

5. The Committee recommends that the Department improve communications, including the use of social media and public understanding of means testing.

6. The Committee recommends that the Department investigate and remove ‘poverty traps’ caused by means testing and other welfare rules.

7. The Committee recommends that in the long term, all savings, properties and investments would be means tested on the actual income accrued from them rather than their nominal value.

8. The Committee recommends that in the first instance all schemes, except Supplementary Welfare Allowance (SWA), that the first €50,000 of capital be disregarded; with the next €10,000 assessed at €1/€1,000 and the balance at €2/€1,000. For SWA, the Committee recommends that the first €20,000 be disregarded with the next €10,000 assessed at €1/€1,000 and the balance at €2/€1,000.

9. The Committee recommends that in the long term, the rate of decrease in payment as means increase under all schemes should not be more than 30%.

10. The Committee recommends that in the short term where the rate of means assessment is more than 50% that it be reduced to 50% immediately.

11. Following this, the Committee recommends that a year after this change the effect be reviewed with a view to effecting further reductions in the rate of means assessments over the coming years to 30%.

12. At present, a partner’s income is assessed for Jobseeker’s Allowance, Disability Allowance, Farm Assist and Rural Social Scheme, in such a way that the first €60 is disregarded and the balance is assessed at a rate of 60%. With a view to stimulating economic activity the Committee recommends, as a first step, that the first €100 be disregarded and the balance is assessed at a rate of 50%

13. The Committee recommends the abolishment of the means test on the Increase for Qualified Adult (IQA) for State Pension Contributory on a phased basis. However, as it is likely that IQA will continue to be a feature of the system for the foreseeable future, particularly for older pensioners, there is a need to reform it steadily and progressively. IQA should continue to be payable to the recipient of IQA directly.

14. The Committee also recommends, in the first instance, the increase in line of the disregard for IQA to €300 per week from the present €100 per week.

15. The Committee recommends that the first €50,000 of capital should be disregarded, with the next €10,000 assessed at €1/€1,000 and the balance at €2/€1000. For the balance, the Committee recommends that the reduction after that would be at a rate of 30%

16. The Committee recommends that in the year after the implementation, the scheme would be reviewed to further relax the rules of the IQA with a view to the eventual abolition of the means test.

17. The Committee recommends for the State Pension (Non-Contributory) that the first €100 of income be disregarded (other than from foreign social security pensions) and that the slide off after that would be at a rate of 50%.

18. The Committee recommends for the State Pension (Non-Contributory) that €200 per week of earned income from both self-employed and PAYE income would be disregarded as opposed to it only being for Employed income at present.

19. The Committee recommends that for the One Parent Family Payment, the disregard of income be increased to €200/week and the balance assessed at a rate of 30% of income in light of the fact that those on One Parent Family Payment have been shown on the whole to suffer the highest level of poverty in society.

20. The Committee recommends that participants in the Farm and Fish Assist Schemes be assessed 50% as opposed to the 70% at present (except for the Environmental Farm Grants) and that a general exemption on the first €100 of income be introduced.

21. The Committee recommends that under the RSS scheme that, as was the case up to 2012, the full rate of payment would be made to all participants on the scheme in receipt of an IQA and Dependent Child Allowance without deduction of means as an incentive to join the scheme, as at present the gain for joining the scheme is €27.50 per week for 19.5 hours worked.

22. The Committee recommends that the Department increase the period between means tests for RSS from one year to an aggregate of three years.

23. The Committee recommends that in each budget the disregard of income for Carers Allowance would increase with a view to eliminating the means test in total by 2028.

24. The Committee recommends that for those with a lifelong disability on Disability Allowance, inheritances from parents or close relatives would be disregarded in the assessment of income and that the balance would be assessed at 30% of the income.