Mary Upton (Dublin South Central, Labour)
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Question 7: To ask the Minister for Social and Family Affairs if he has plans to address the apparent anomaly whereby those in receipt of the non-contributory pension who save a portion of their pension subsequently exceed the means threshold; if he will state the number of persons this affects; if he plans to rectify this situation; and if he will make a statement on the matter. [23033/05]

Séamus Brennan (Dublin South, Fianna Fail)
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In assessing means for social assistance purposes account is taken of any cash income the person may have, together with the value of capital and property, except the person's home. The source of any capital held by a pensioner can and does vary. It can include savings from income while formerly working, savings derived from the sale of property or other assets, savings from occupational or social welfare pensions, gifts, inheritances, accumulated interest or dividends or a combination of these. It would not be possible or practical to distinguish savings derived from a particular source.

Capital is assessed by reference to a formula laid down in legislation. The initial amount of capital is disregarded before means are assessed. From June 2005, this disregard is increased to €20,000 from approximately €12,700 which applied from October 2000. This means that from the beginning of this month, a pensioner with no other means can have capital of up to €28,000 and still receive a pension at the maximum rate. This figure is doubled in the case of a couple.

The enhanced disregard applies to all capital regardless of where it is held, be it in an SSIA, a credit union, with An Post or any other account with a bank or other financial institution or regardless of the initial source of the capital. The new arrangements for capital assessment which I have introduced 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 in the past. I believe that this is a better approach to this issue than to attempt to distinguish different types of capital and apply different rules to them.

While most pensioners spend all or a sizeable portion of their pension each week in meeting their normal living expenses, some pensioners, however, may choose to save part of their pension. However, such savings which are identified must be treated in the same manner as savings from any other source.