Jerry Cowley (Mayo, Independent)
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Question 216: To ask the Minister for Social and Family Affairs his views on amending the situation where persons in receipt of the widow's pension are restricted in accepting employment; and if he will make a statement on the matter. [39725/05]

Séamus Brennan (Dublin South, Fianna Fail)
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Widow's or widower's non-contributory pension is a means tested payment payable to a widow or widower, without dependent children, whose income falls below a certain level and who does not satisfy the contribution conditions for a contributory widow's or widower's payment.

In assessing means for social assistance purposes, account is taken of any cash income the person or his or her spouse may have, together with the value of capital and property, except the home. Weekly means of €7.60 per week are disregarded, and all means in excess of that figure, including those from earnings from employment, are assessed in full.

The recent budget made provision for several very important measures which are designed to target resources at specific groups of people, including widows and widowers. In considering those measures, I was anxious to target those who are at the greatest risk of poverty, to allow people to supplement their social welfare pension through employment, to encourage saving, and to simplify the system of income support for older people who do not receive contributory pensions.

Budget 2006 provides for an increase of €16 per week, 9.6%, for all non-contributory pensioners, including widows and widowers aged 66 or over. Non-contributory pensioners, including widows aged under 66, will receive an increase of €17 per week, 11.4%.

On budget day, I was also pleased to announce that I propose to introduce, in September 2006, a standardised State non-contributory pension, replacing the old-age pension and, for recipients aged 66 and over, the blind pension, widow's or widower's pension, one-parent family payment, deserted wife's allowance and prisoner's wife's allowance.

All the schemes in question feature a common means disregard of €7.60 per week, which has not increased since the 1970s. The means disregard for the new non-contributory pension will be €20 per week, an increase of €12.40 per week. Approximately 34,000 pensioners who currently receive a reduced rate of payment, including 3,380 recipients of widow's or widower's non-contributory pension, will gain as a result of the change. They will receive increases in their payment of up to €12.50 per week in the personal rate and up to €8.30 per week in respect of the qualified adult rate, where applicable.

In addition, I also propose to introduce a specific additional disregard of €100 per week where the pensioner is in employment. That new disregard relating to earnings from employment is intended as an initial incentive to facilitate non-contributory pensioners who wish to continue working, or to re-enter the workforce, to do so. Accordingly, recipients who are in employment will receive an additional increase in their payment, depending on the level of their earnings, over and above the increases that I have already outlined.

Furthermore, consequent on the increase in the means disregard to €20 per week, a single person with no other means will be able to have up to €35,000 in capital and still qualify for a pension at the maximum rate. That figure is doubled in the case of a pensioner couple.

By any standards, the levels of increases announced are exceptional. The proposed modernisation of the current arrangements is also a further demonstration of our commitment to the elderly and to those who have lost their spouses.