Dáil debates

Wednesday, 23 February 2005

3:00 pm

Photo of Eamon GilmoreEamon Gilmore (Dún Laoghaire, Labour)
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Question 68: To ask the Minister for Social and Family Affairs the way in which his Department assesses a person's capital assets for social welfare eligibility; if he considers the present system realistic and fair; and if he will make a statement on the matter. [5892/05]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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I recently reviewed the current arrangements for the assessment of capital for social assistance purposes and am introducing significant improvements by way of the Social Welfare and Pensions Bill being debated in this House. In assessing means for social assistance purposes, account is taken of cash income a person may have together with the value of capital and property except the home. Capital may include stocks and shares of every description, savings certificates, bonds, national instalment savings, special savings investment accounts, and money invested in a bank, building society or other type of financial institution. The first €12,694.38 of capital is disregarded and the balance is assessed.

Last October I requested my Department to undertake a review of the current arrangements for the assessment of capital, particularly in so far as they apply to SSIAs, with a view to bringing forward proposals in the budget for 2005. On budget day, I was pleased to announce that the capital disregarded for means test purposes for all schemes except supplementary welfare allowance would be increased to €20,000, an increase of over €7,300. The enhanced disregard applies to all capital regardless of where it is held, be it in an SSIA, a credit union account, with An Post or other account with a bank or other financial institution. The new arrangements will mean that a single non-contributory pensioner with no other means can have capital of up to €28,000 and still qualify for a pension at the maximum rate. This figure is doubled in the case of a pensioner couple. The improvements will come into effect in June and are designed to ensure that social welfare means-testing arrangements do not act as a disincentive to claimants to become savers or penalise those who have been regular savers.

Photo of Willie PenroseWillie Penrose (Westmeath, Labour)
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I thank the Minister for his reply and acknowledge that he has increased the capital disregards, which is very welcome. The Minister referred to the value of the home being disregarded for social welfare schemes. This is not strictly the case when applied to carers. I am aware of a carer who owns a house but who moved into her 95 year old father's home to care for him. She earns a rental income of €120 a week from her home which she has declared. Her father required full-time care and attention and she needed to stay with him in his house which is seven miles from her house.

As a result of the manner in which capital assessment is computed under the relevant legislation, the Minister's officials were forced to take into account the capital value of her house in which she was unable to live because she was providing full-time care for her elderly father. The departmental officials would not take into account the income arising from the rental value of the house. The Minister is an accountant and will be aware that the rental value of the house is the actual as opposed to the imputed value arising in capital.

Is it not time to change that rule? That calculation deprived the lady, herself in her late 40s, of the carer's allowance. Is this not grossly unfair? She was saving the State approximately €600 a week, was seeking a carer's allowance of approximately €150 a week but lost out. Bureaucratic capital evaluation bears no relationship to the actual income deriving from the house. Although it was let to an auctioneer, it was still regarded as the woman's income.

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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I will examine the individual case. However, the present rules are that a person's home is not taken into account. I presume that means a person's home in which a person lives. If the home is an investment, the owner does not live in it and it is available for rental, then the present rules, as I understand them, mean the property is not exempt. Cash income, the value of capital and property, except one's own home, is assessed. In the case cited by the Deputy, it seems one person has left their home and lives in another home to care for somebody. The rented house is then regarded as part of the person's capital assets because, even though technically it is the person's home, they do not live in it. I accept that scenario will arise. As the rules are made to apply across the board, discretion is limited with regard to major decisions of this nature. It would not be fair to start exempting homes which are uninhabited or not available for rental, although I accept that anomalies and hard cases of the type the Deputy describes can arise. The supplementary welfare allowance was introduced to act as an ultimate safety net for people who may be caught out by various anomalies. The Department examines cases such as those outlined by the Deputy on an ongoing basis to determine whether we can learn general rules. Under the current rules a house available for rental or already rented out would have to be included in the capital value.

Photo of David StantonDavid Stanton (Cork East, Fine Gael)
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Are carers treated less favourably than pensioners when assessments of capital means are carried out?

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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To my knowledge, that is not the case. I will check the position but I understand the same rules, including a means test, apply.