Séamus Brennan (Dublin South, Fianna Fail)

I thank the Senator for proposing the amendment. She will be aware that I asked the Department to carry out an examination of the current arrangements of the assessment of capital, particularly as they apply to SSIAs, with a view to bringing forward proposals which might be included in budget 2005. On budget day, we announced that the capital disregards for means test purposes for all schemes, except supplementary welfare allowance, would be increased to €20,000, an increase of over €7,300, which is a significant jump. The enhanced disregard applies to all capital, regardless of where it is held, be it in an SSIA, credit union, post office, bank or any other financial institution. This means 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.

These improvements will come into effect in June or in April in the case of carer's allowance. They are designed and their main aim is to ensure social welfare means testing arrangements do not act as a disincentive to those who want to save.

When SSIAs mature, it is estimated they will be probably amount to somewhat less than €20,000. By setting the capital disregard at €20,000, we have gone a long way towards dealing with the issue. In short, if one's only capital is an SSIA, it will be totally disregarded. On the other hand, if the SSIA is only part of one's portfolio, it is not possible to distinguish between different savings. What could one say to somebody who has savings in a credit union, for example? One cannot tell a social welfare recipient one is disregarding the SSIA per se while including credit union savings. I thought a sensible response would be to increase the disregard by over €7,000 to €20,000, a proposal welcomed by most sides in the other House. If a person only has an SSIA, it will be totally disregarded, although not because it is a SSIA per se. However, I pitched the figure to try to ensure an SSIA would be disregarded in assessing means if it was a pensioner's only capital. I hope this deals with the matter.