Richard Bruton (Dublin North Central, Fine Gael)
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Question 144: To ask the Minister for Social and Family Affairs the difference in the treatment of capital in the means test for ordinary social welfare payments and for supplementary welfare; and his views on whether this distinction is justified. [37476/05]

Séamus Brennan (Dublin South, Fianna Fail)
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In order to qualify for any form of social assistance a person must satisfy a statutory means test. This means test includes a value attributed to any capital a person may have. Capital refers to savings, investments, cash-on-hands and property, excluding the person's own home. The value of all of these items is added together and a formula is applied to their total value to calculate a person's weekly means, depending on the particular social assistance scheme in involved.

The rules for the means assessment of capital are set out in the Schedules to the Social Welfare (Consolidation) Act 1993, as amended subsequently. Under these rules means derived from capital or savings are assessed for supplementary welfare allowance purposes on a different basis than that applicable to other social assistance schemes. The policy basis for this is that supplementary welfare allowance is designed to provide assistance as a scheme of last resort, to ensure that every person in the State has sufficient resources to meet their basic income needs, as defined by the prevailing maximum rate of SWA. On this basis applicants are expected to utilise whatever other resources they have available to them in the first instance, including any income, capital or other savings. In the event that these resources are insufficient, as determined by the means assessment, then SWA is payable at an amount which brings their income position up to the prevailing basic income level.

With effect from June 2005, the capital assessment for the social assistance schemes generally is as follows. The first €20,000 of capital is disregarded, the next €10,000 is assessed with a weekly value of €1 per €1,000 and the next €10,000 is assessed with a weekly value of €2 per €1,000. The remainder is assessed with a weekly value of €4 per €1,000. For the purpose of the supplementary welfare allowance means test, capital is assessed as follows. The first €520 of capital is assessed at 5%, and the balance of capital is assessed at 10%. The resulting figure is then divided by 52 to give the weekly value of the means.

Given the objectives of the SWA scheme, it would be perverse to award SWA to a person with substantial savings or other capital. The capital assessment formula applicable to SWA is not intended to determine a potential rate of interest or income from the capital, but rather to ensure that any such capital or savings should be utilised by applicants towards their basic income needs. Apart from this assessment formula, any interest or income actually received by an applicant derived from this capital is not taken into account further for SWA means assessment purposes. The SWA scheme is currently being reviewed as part of my Department's series of expenditure evaluations. The review is being carried out by an interdepartmental working group chaired by my Department with representatives from the Department of Finance and the Health Service Executive. This review involves a full appraisal of the efficiency and effectiveness of all aspects of the scheme, including the means assessment rules. Any changes in the criteria for the means assessment of capital under the supplementary welfare allowance scheme will be considered in the context of the recommendations of this review group when it reports in due course.