Pat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context

Question 790: To ask the Minister for Social and Family Affairs if his attention has been drawn to the problems that can arise where persons with an intellectual disability inherit money when same is assessed by his Department as means, thereby eliminating or significantly reducing the entitlement to a social welfare payment; if he will review this practice, particularly in the case where a person's disability is such that it effectively prevents access to or use of the money; and if he will make a statement on the matter. [1037/06]

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

Social protection of the population in general is provided through a combination of insurance-based payments and assistance payments targeted at need. The purpose of the means test is to ensure that, for those who do not have social insurance cover or who have insufficient PRSI contributions to qualify for benefit, resources are targeted most effectively. The weekly rate of means-tested social welfare payments must, under legislation, be reduced by the amount of any weekly means assessed. The main items counted as means include cash income which the claimant or his-her spouse or partner may have, the value of savings, investments, shares, land etc., or any property other than the claimant's home. Capital owned by a recipient of a social assistance payment is assessed in the normal way, with a disregard of the first €20,000 of the amount held.

In the case of inheritance, some persons making a will give consideration to the creation of a discretionary trust for people with a disability and this has somewhat different implications for the assessment of means. A discretionary trust may be created by deed during a parent's, or other relative's, lifetime when perhaps a lump sum or windfall is to be invested or it can be established in a will along with the naming of trustees. Funds within a discretionary trust are administered at the discretion of the trustees and whether they are assessable as means will depend on how they are administered.

Where a discretionary trust fund is set up for a recipient of social welfare means-tested payment, a life interest in such a fund would mean that any cash income that she or he may reasonably be expected to receive from it during a particular year is assessable as means. Accordingly, periodic payments received from the fund are regarded as cash income and assessed as means. However, funds used to purchase items of capital expenditure or services on behalf of the beneficiary do not constitute means, for example, money spent on renovating the house in which the claimant resides, the purchase of a car or holiday or assistive technology. Similarly, occasional sums withdrawn or received by the claimant for particular purposes are not normally regarded as cash income for means purposes. Transfers of capital to the beneficiary are assessable as capital. Unspent balances held by the claimant, for example, in the claimant's own bank account, are assessable under the rules governing capital. On secondary benefits, the free travel pass and any other extra benefit entitlements will remain with the person as long as they are in receipt of the relevant social welfare payment, whether at full or reduced rate.

If the Deputy wishes to obtain further information on a particular case or situation, my Department will be happy to provide a response.