Séamus Brennan (Dublin South, Fianna Fail)

I consider that the current arrangements concerning entitlements to a qualified adult allowance are reasonable in the circumstances, particularly having regard to a number of important improvements I introduced in budget 2006.

As the Deputy is aware, in the case of contributory pensions and most other contributory and non-contributory social welfare payments, a qualified adult allowance, QAA, is payable in respect of a spouse or partner who is wholly or mainly maintained by the claimant.

Account is taken of the spouse or partner's income for the purposes of determining whether the spouse is wholly or mainly dependent. A spouse or partner's income includes income from employment, self-employment, income from other sources such as rents from the letting of property, income from occupational pensions and foreign social security payments, as well as income from capital.

Where capital is in the joint names of the claimant and spouse or partner, both parties are the legal owners of the capital. As a result, in such cases, my Department assesses half the capital against each, as the Deputy knows. Prior to budget 2006, a qualified adult allowance at the maximum rate was payable where the spouse-partner's income was less than €88.89 per week and tapered reduced rates were payable where income was greater than that but less than €220 per week. A qualified adult allowance was not payable where income exceeded €220 per week.

On budget day, as part of my reform programme, I was pleased to announce a number of further improvements to these means testing arrangements, including an increase in the spouse's income threshold for entitlement to the qualified adult allowance from €88.88 to €100 a week. This improvement comes into effect on different dates, depending on the scheme, during the course of 2006. Another improvement to the means testing arrangements features an increase in the upper threshold for entitlement to a tapered rate of QAA to €240 with effect from January last, and to €250 when the lower threshold increases to €100.

When these improved arrangements are in place, and assuming that the spouse-partner has no other means, a full rate QAA will be payable where the spouse has capital of up to €58,000. Capital between €58,000 and up to €95,000 will give entitlement to a reduced rate of QAA. This will mean that a pension or redundancy lump sum, to which the Deputy's question refers, lodged in joint names, would have to be in excess of €116,000 before it would affect entitlement to a full rate qualified adult allowance.

If at any time the amount of capital held by the spouse or partner, either jointly or singly, is reduced, they can request my Department to reassess their entitlement to a QAA payment.

The provisions I have outlined offer substantial flexibility to those couples where a pension or redundancy lump sum is a factor, but the matter will be kept under review.

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