Paul Connaughton Snr (Galway East, Fine Gael)
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Question 305: To ask the Minister for Social and Family Affairs if the new regulations allowing €100 earnings to be disregarded when assessing entitlement to an old age pension will be available to the self-employed; and if he will make a statement on the matter. [8073/06]

Séamus Brennan (Dublin South, Fianna Fail)
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On budget day, I was pleased to announce that I proposed to establish, in September 2006, a standardised State non-contributory pension, replacing the old age pension and, for recipients aged 66 years and over, blind pension, widow/widower's pension, one-parent family payment, deserted wife's allowance and prisoner's wife's allowance.

In addition to the simplification and rationalisation of pension provision for non-contributory pensioners, the State pension, non-contributory, will contain two key features. The general means disregard will be €20 per week, an increase of €12.40 per week over and above that currently applying to the schemes the new pension will replace. This disregard will apply to means from whatever source, including income from self-employment. Over 30,000 pensioners who are currently in receipt of a reduced rate of payment will gain from this change. The increase in the personal rate of payment will be up by €12.50 per week while the qualified adult rate, where applicable, will increase by up to €8.30 per week.

A specific additional disregard of €100 per week will apply where the pensioner is in employment. This 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.

The budget did not provide for the proposed disregard to apply to income from self-employment or to any other forms of income other than earnings. In general, income disregards normally apply to income from employment only. Apart from providing an incentive to take up employment, this approach recognises that persons in employment incur additional expenses such as travelling expenses, clothing and so forth consequent on the employment. In contrast, all expenses necessarily incurred in carrying out any form of self-employment are always disregarded when calculating means from self-employment. This means that such earnings are assessed net of expenses incurred by the person in the course of their work, for example, on petrol/diesel, purchase of equipment and raw materials and so forth.

By any standards, the levels of increases announced in the budget are exceptional. The proposed modernisation of the current arrangements is also a further demonstration of our commitment to all those who are elderly.