Catherine Murphy (Kildare North, Independent)
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Question 255: To ask the Minister for Finance if his attention has been drawn to the fact that many widowed persons are experiencing distress where the value of the deceased's SSIA exceeds €10,000 and therefore draws them into probate; if he will request that this threshold be increased by the Irish Central Bank to prevent such a situation arising; and if he will make a statement on the matter. [39300/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am not aware of widespread occurrences of the problem raised by the Deputy. A statutory exemption allowing for the paying out of funds from a deceased person's account, other than a joint account, without probate or prior nomination of the beneficiary is available only to one type of financial services provider. Any such payment is at the discretion of the institutions concerned who must also report payments, other than those to the executor of the estate, to the President of the High Court. The amount which may be paid out is subject to a limit set by the Central Bank and Financial Services Authority of Ireland. I would not favour increasing this limit to facilitate the paying out of SSIA funds as it could both confer an unintended advantage on a particular type of financial institution while being inequitable vis-À-vis the heirs of holders of SSIAs and other savings products with all other financial service providers.

It needs to be borne in mind that there are specific provisions in general law regarding the administration of an estate of a deceased person, and these must be followed before the assets of the estate can be distributed. The funds in the SSIA account constitute an asset of the estate of the deceased person. The net assets of the estate will be distributed to the beneficiaries by the executors or administrators following grant of probate or of letters of administration.

The SSIA scheme commenced on 1 May 2001 and is administered by qualifying savings managers in accordance with legislation and guidelines issued by the Revenue Commissioners. In general terms the amount of funds available on the death of an SSIA holder are set out in SSIA rules.

The actual maturing of an SSIA on the death of an individual is an automatic process and is administered by the qualifying savings manager concerned. The tax liability which falls due in the event of death is arrived at by deducting, from the aggregate market value of the assets in the account, the aggregate amount of all subscriptions and tax credits made to the SSIA, in so far as that amount has not previously been treated as withdrawn from the SSIA on a partial withdrawal. A rate of 23% is applied to the resulting figure to give the tax due. Once tax has been deducted the SSIA maturity process is complete and the remaining funds become part of the estate of the deceased.

In the case of an SSIA that was a deposit account from which no withdrawals had been made up until date of death, tax at 23% would only apply to the interest earned.