Trevor Sargent (Dublin North, Green Party)
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Question 120: To ask the Minister for Social and Family Affairs if he has intentions of commissioning an investigation into his Department's practice of re-assessing savings derived from means-tested non-contributory pension payments made to old age pensioners. [23009/06]

Séamus Brennan (Dublin South, Fianna Fail)
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In assessing means for social assistance purposes account is taken of any cash income the person may have, together with the value of capital and property (except the home). Capital may include the following:

—Stocks and shares of every description, which are assessed according to their current market value.

—Savings certificates, bonds, national instalment savings, which are assessed according to their current market value.

—Money invested in a bank, building society etc.

The source of any capital held by a pensioner can and does vary. It can include savings from income while formerly working, savings derived from the sale of property or other assets, savings from occupational or social welfare pensions, gifts, inheritances, accumulated interest or dividends or a combination of these. It would not be possible or practical to distinguish savings derived from a particular source. A better approach is to improve the means testing arrangements for pensioners generally and it was in this context that I introduced major improvements for pensioners in the last two Budgets.

For the purposes of old age non-contributory pension, an initial amount of capital has always been disregarded for means test purposes. This amount was £200 up to 1997 and was increased to £2,000 in that year. In October 2000, the disregard was substantially increased to £10,000. In Budget 2005, I was pleased to announce that the amount of capital disregarded for means test purposes for all schemes (except supplementary welfare allowance) was to be increased from EUR12,694.38 to EUR20,000, an increase of over EUR7,300 with effect from June 2006.

These new arrangements mean that a single non-contributory pensioner, with no other means, can have capital of up to EUR28,000 and still qualify for a pension at the maximum rate. This figure is doubled in the case of a pensioner couple.

In Budget 2006, I announced that I propose to establish, a standardised State (Non-Contributory) Pension, replacing the Old Age Pension and, for recipients aged 66 and over, Blind Pension, Widow/er'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 EUR7.60 per week, which dates back to the 1970s. The means disregard for the new non-contributory pension will be EUR20 per week, an increase of EUR12.40 per week. Over 30,000 pensioners who are currently in receipt of a reduced rate of payment will gain from this change.

The increase in the general means disregard, from EUR7.60 to EUR20 per week, specifically benefits those older persons who are in receipt of reduced rate non-contributory pensions because one or both of a couple have income from capital, occupational pensions, foreign social security pensions or from some other source. Furthermore, consequent on the increase in the means disregard to EUR20 per week with effect from the end of September next, a single person, with no other means, will be able to have up to EUR35,000 in capital and still qualify for a pension at the maximum rate. This figure is doubled in the case of a pensioner couple.

These improvements, along with record increase in the personal and QAA rates of payment, have been of considerable benefit to all pensioners.