Thursday, 7 October 2021
Ceisteanna Eile - Other Questions
16. To ask the Minister for Employment Affairs and Social Protection if her attention has been drawn to the fact that couples who are in receipt of the State contributory pension and a payment for a dependent adult are being penalised in cases in which savings and investments are put in joint names rather than in the name of the primary earner; if she plans to address this issue; and if she will make a statement on the matter. [48301/21]
A situation has arisen for couples who have worked a lifetime, where one was the primary earner and the other stayed at home to rear families and perhaps care for loved ones, and who were in receipt of a contributory pension and a dependent adult allowance, or an increase for a qualified adult, IQA, as it is called in the jargon.
Let us take two couples who have saved money. Perhaps they have received a lump sum at the end of an employment or a legacy. The first couple puts this money into the primary earner's bank account, while the other couple puts it into joint bank accounts. In that situation, if the savings of a lifetime go over €150,000, the dependent adult allowance is decreased. If a couple puts the money into a single bank account, which nobody would recommend, they receive the whole amount.
I thank the Deputy for raising this question. Recipients of the contributory State pension can claim an increase in their pension in respect of a qualified adult, subject to a means assessment. A qualified adult is the spouse, civil partner or cohabitant of the pensioner who has been wholly or mainly maintained by that pensioner. The means assessment reflects the fact that there is an expectation that people with reasonable amounts of income or capital are in a position to use these resources to support themselves so that social welfare expenditure can be directed towards those most in need.
Entitlement to the contributory State pension is based on a person’s social insurance record and the personal rate of payment is not subject to a means test. Only the spouse or partner of the claimant is means-tested. An increase is payable at the maximum rate of payment where the means of the spouse or partner are €100 a week or less, while reduced rates are payable where the means are over €100 or less than €310 per week. No increase is payable where the means of the spouse or partner are in excess of €310 per week. The means assessed include income from employment or self-employment, non-social welfare pensions and the capital value of savings, investments and property other than the family home. It should be noted that the value of the family home, regardless of who the legal owner is, is never taken into account in this assessment. Where savings, property or other assets are held jointly, the spouse or partner’s means are taken to be half of the total amount.
It is a matter for each couple to decide how their finances are arranged and the Department has no role in this. The current means-testing arrangements are based on the actual means of the spouse or partner at any given time.
Society always recommends that where one partner is earning, a couple would share joint accounts and the primary earner would not control all the finances. We then say that is fine because the couple has followed our advice. However, we are now cutting their payments for doing what we advised them to do.