Willie Penrose (Westmeath, Labour)
Link to this: Individually | In context

Question 73: To ask the Minister for Social and Family Affairs if any refunds made to pensioners residing in nursing homes, arising from the recent Supreme Court decision that found that charges levied on them were illegal, will not be allowed to impact on their current pension entitlement; and if he will make a statement on the matter. [11948/05]

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

I understand my colleague, the Tánaiste and Minister for Health and Children, will very shortly bring proposals to Government on repayments to residents and former residents of publicly-funded long-stay care places.

Over the period in question, my Department paid affected persons their full pension and other social welfare entitlements and had no function in the deduction of the charges made.

The implications for social welfare pensions and other entitlements will depend on the nature of the repayments scheme. However, it is my intention that any repayments will not impact on current pension entitlements and I will bring forward proposals in this regard when full details of the repayment schemes have been finalised.

As the Deputy is aware, I have made provision in the recent Social Welfare and Pensions Act to introduce enhanced capital assessment arrangements generally. From June next, a single pensioner with no other means will be able to save up to €28,000 without affecting his or her entitlements. This figure is doubled for a couple. As a result, all pensioners will, if they wish, be able to put an enhanced sum aside without worrying about any effect on their pension.

Willie Penrose (Westmeath, Labour)
Link to this: Individually | In context

I welcome the late clarification from the Minister. This is a long time coming and it has caused great anxiety to the very large number of people who will qualify for the refunds as a result of the illegal levying of charges. The State would have compounded the error if it had included these moneys as part of the means test assessment. Precedence already existed regarding payments to hepatitis C victims and other groups to ensure they were excluded. Is it the position that the Minister is giving an unequivocal commitment to ensure that the repayments will not affect non-contributory old age pensioners and widows' pensions in the future? That is an absolute commitment given on the floor of the House and the Minister cannot resile from it.

Another problem we have been pursuing concerns the counting of social welfare payments as assets in the reassessment of the means of old age non-contributory pensioners. I am talking about the claw-back policy being operated by the Minister's Department as a result of which more than €20 million was obtained in recent years. Is the Minister aware that under the new legislation money saved by some pensioners for a rainy day, their burial or to provide for nursing home care in the future is now being calculated as part of their assets and if it is more than €20,000, it will lead to a reduced income? I put it to the Minister that this policy is a disincentive to people to save and live frugally. Could we re-examine that policy?

I welcome what is being done regarding the nursing home subvention payments because people should not have those payments assessed but unless the Minister examines the current claw-back system operating in respect of non-contributory old age pensioners, it will lead to a discrimination case being taken in the courts.

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

It is my intention that any repayments will not impact on current pension entitlements. I will bring forward proposals in this regard when I have full details of the repayments scheme. The repayments scheme has not yet been signed off by Government or finally approved and as soon as we have that scheme finalised, I will be able to bring forward proposals to give effect to my intention that repayments will not impact on current pension entitlements.

We have yet to take a decision in the case of beneficiaries of an estate of deceased persons in respect of which a repayment is due. That decision will be taken in the light of the content of the repayment scheme. I confirm to the Deputy today that there will not be any impact on current pension entitlements. Complications arise where the money is paid to an estate and there are beneficiaries from that estate. I am anxious that we align our thinking with whatever final decisions are taken in the area of inheritance tax and taxation generally. I will do everything possible to ring-fence whatever the repayment scheme brings people so that it does not affect their social welfare entitlements but I put down a marker that there has yet to be a decision in the case of money paid to an estate of a person as opposed to a living pensioner. In the case of a pensioner I am happy to give that categoric assurance. In the other case, we have to do some additional work on it.

In the case the Deputy raised where an overpayment is assessed against the estate of a deceased pensioner, I am aware of this issue and I have some sympathy with it. The difficulty is in trying to administer any scheme that would exempt savings which came from one's pension. The basic point the Deputy is making is that if someone saves money from their pension and they either die, their estate is tackled or, in the case of a living person, there is a review of their case, such savings would not be taken into account in any means test. In other words, if they have saved their pension it should not be part of a means test. I do not have a major difficulty with that policy objective. The difficulty is in trying to administer something like that. My advice is that we would then be brought into the business of trying to identify from where a person's savings came and asking a person if those savings come from their pension or elsewhere.

A better way to tackle it is the way I am doing it, which is that I have increased the disregard to €20,000 from €12,000. I did that in recent months, as the Deputy is aware, and there is the additional €8,000 for pensioners. That means that pensioners can save up to €28,000. If we work on that and increase that threshold from time to time, as best we can afford it, that is a better way to exempt savings from affecting one's welfare. I have sympathy with the objective but the logistics of trying to do it are quite difficult. A better way might be to continue to raise the disregard so that they can save more money, from wherever it comes. We are then not brought into the business of asking them where their savings came from; it is more dignified for them also.

Willie Penrose (Westmeath, Labour)
Link to this: Individually | In context

While I understand the Minister's point, the Revenue Commissioners are able to identify and trace all sources of funds. For example, a small-scale farmer has identity and TB cards for his or her cattle and the TB office keeps records also. If a person wins money with a prize bond, it is readily identifiable. The problem is not as significant as the Minister contends. He will run into difficulties when a legal case is taken on the basis of invidious discrimination and he will face a serious mess. The Department should immediately notify all old-age non-contributory pensioners and widows of the operation of the clawback. Many people are saving for a rainy day or to pass on an inheritance and when they die, the sums involved will be included in the calculation of assets for the clawback. Last year, the Department clawed back over €5 million. This is a serious problem and I alert the Minister to the steam train approaching him in the form of a legal action if he does not tackle it.

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

I will review the matter, especially as it relates to deceased persons. The Deputy should be aware, however, that the funds being recouped to the Exchequer were not, for whatever reason, the legal entitlements of whoever received them. Means may inadvertently not have been disclosed for example. We are clawing back money to which people were not entitled. Having said that, I will review the matter.

Willie Penrose (Westmeath, Labour)
Link to this: Individually | In context

It is non-capital assets that are at issue. Our focus is on pension payments already received and means tested by the Department.

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

I will review the matter.