Enda Kenny (Mayo, Fine Gael)
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Question 58: To ask the Minister for Social and Family Affairs if he has considered or will consider the extension of the fuel allowance scheme to all older people who are in receipt of the old age contributory and non-contributory pensions; the estimated cost of same; and if he will make a statement on the matter. [4667/06]

Séamus Brennan (Dublin South, Fianna Fail)
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The aim of the national fuel scheme is to assist householders on long-term social welfare or health service executive payments with meeting the cost of their additional heating needs during the winter season. Fuel allowances are paid for 29 weeks from end-September to mid-April and are not intended to meet the full cost of heating. Budget 2006 provided for an increase in the rate of fuel allowance of €5.00 from €9.00 to €14.00 or €17.90 in designated smokeless areas. Some 274,000 customers — 151,000 with basic fuel allowance and 123,000 with smokeless supplement — will benefit in 2006 at an estimated cost of €125.1 million.

Eligibility is subject to means. The main conditions that apply to the scheme are that a person must be in receipt of a qualifying payment, satisfy a means test and must either be living alone or only with a qualifying dependant. The household composition and means test rules for fuel allowance scheme qualifying purposes is to ascertain the ability of applicant households to meet their normal heating requirements out of their own resources and to ensure the maximum amount of support is targeted at those most in need of the fuel allowance support.

People who already qualify for means-tested pensions or allowances such as old age non-contributory pension, long-term unemployment assistance or one-parent family payment do not have to undergo a further means test to qualify for fuel allowance. The majority of people who receive fuel allowances qualify because they satisfy the relevant means test for their primary weekly payment. In the case of contributory pensions such as old age contributory, retirement and invalidity pensions, which are not means tested, a person may have a combined household income of up to €51 per week, or savings or investments of up to €46,000, over and above the maximum contributory pension rate used for reference purposes, and still qualify for fuel allowance. The fuel allowance income limits increase each season in line with the increases in this reference pension rate.

Based on the current rates of payment for fuel allowance, it is estimated that the extension of the allowance to people who are in receipt of old age contributory and non-contributory pensions but not in receipt of a fuel allowance would cost over €70 million annually.

In addition to the fuel allowance, over 320,000 pensioner and other households qualify for electricity or gas allowances through the household benefits package, payable towards their heating, light and cooking costs throughout the year, at an overall cost of €109 million in 2005. As currently structured, these allowances are linked to unit energy consumption, so that these people are protected against unit price increases in electricity or gas.

Fuel allowances are incorporated in the recipient's weekly social welfare payment and are not intended to meet heating costs in full. The Government's objective is to ensure that the recipient's total weekly income, including the fuel allowance, is sufficient to meet all of their income needs, including heating costs. Budget resources have been concentrated on providing significant real increases over and above inflation each year in all primary social welfare pension, benefit and assistance rates. This is a more costly approach than increasing fuel allowances because the increase is paid for the full year and not just for the 29 weeks of the winter heating season. This approach delivers a better outcome for pensioners and others by substantially increasing their income in real terms over the whole year, to better assist them in meeting their normal basic living costs, including heating. Payment rates have increased by between 47% and 57% over the last four years, while inflation has been less than 13% in total over that period.

There is also a facility available through the supplementary welfare allowance scheme to assist people in certain circumstances who have special heating needs. If a person has an exceptional heating cost by virtue of a particular infirmity or medical condition which he or she is unable to meet out of household income, it is open to him or her to apply to the local community welfare officer for a special heating supplement under the supplementary welfare allowance scheme. Any changes in the means rules or other conditions of the scheme would have significant cost implications and would have to be considered in the context of the budget and in the light of the resources available to me for improvements in social welfare generally.