Written answers

Tuesday, 27 June 2006

Department of Social and Family Affairs

Social Welfare Benefits

11:00 pm

Paddy McHugh (Galway East, Independent)
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Question 328: To ask the Minister for Social and Family Affairs if a person on a non-contributory old age pension who has their farm leased and is therefore in receipt of income from the lease will have the first €100 per week of that income disregarded for calculation purposes in determining the amount of their pension. [24385/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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For the purposes of social assistance schemes, property which is leased is assessable as means. In the case of property such as a second house or a commercial building, the capital value of such property is assessed. No account is taken of the net rental income, if any. There are special arrangements in place where land is leased on a short-term basis, such as the 11 month system. In this case the net profit, after all expenses, is assessed as means. This basis of assessment is more favourable than that which applies to other types of property.

I announced, on Budget Day, a number of major initiatives for non-contributory pensioners aged 66 and over. These reforms are designed to target resources at particular groups of older people, including the farmers in question. The improvements included a EUR16 per week increase in the personal rates of payment, a EUR3.60 per week increase in the Over-80 Allowance and a EUR5 per week increase in the National Fuel Scheme.

In addition, I also announced that I proposed to establish, in September 2006, 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 general means disregard of EUR7.60 per week, which has not increased since 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, including many thousands of farmers. The increase in the personal rate of payment will be up to EUR12.50 per week while the Qualified Adult rate, where applicable, will increase by up to EUR8.30 per week (over an above the weekly increases mentioned earlier). Furthermore, 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.

In addition, I am also introducing a specific additional disregard of EUR100 per week 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. Any further improvements to the new pension, including the extension of the disregard to the leasing of land, would fall to be considered in a Budgetary context.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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Question 329: To ask the Minister for Social and Family Affairs the reason pensioners who live in Ireland and receive a UK pension are not entitled to a Christmas bonus from the Irish or UK Governments; if he will extend the payment to all pensioners living in Ireland; and the estimated cost of this proposal. [24395/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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The Christmas bonus payment was introduced in December 1980. There have been a number of developments in this initiative since its inception, including changes in the level of the bonus payment which has been at the rate of 100% over the past 6 years, the introduction of a minimum payment (EUR30 in 2005) and the extension of the categories of eligible claimants.

The focus of the bonus has always been on assisting people who rely on the social welfare system for financial support over the longer term. These include recipients of retirement, old age (contributory and non-contributory), widow's, widower's and invalidity pensions, one-parent family payment, carer's allowance, disability allowance, long-term unemployment assistance, farm assist and people on employment support payments, for example, the back to work allowance. The bonus is also payable to certain participants on FAS, VTOS, job incentive and community employment schemes and to those in receipt of payment under the rural social scheme, which was introduced in 2004, and operates under the aegis of my colleague the Minister for Community, Rural and Gaeltacht Affairs.

The Christmas bonus payment benefited over 1.2 million people in 2005, comprising approximately 835,000 social welfare recipients and their 384,000 dependants at a total cost of almost EUR140 million.

Recipients of pensions from other countries who live in Ireland are eligible to apply for the old age non-contributory pension and will receive a payment if their income is such that they satisfy the means test. Where appropriate, the non-contributory pension can be paid in addition to a pension from another country and many recipients of the UK state pension benefit in this way and receive the Christmas bonus payment. Changes in the income disregard for non-contributory pensions announced in the Budget will help more people to qualify for a pension and improve the income of existing pensioners on reduced payments. In Budget 2006 the means disregard was increased by EUR12.40 per week to EUR20 per week.

The Christmas bonus is not a payment in its own right but a supplement to the weekly payment of social welfare recipients. In the circumstances, it cannot be paid to people without an entitlement under the Irish social welfare system or to those whose pension payments are made exclusively under the social security regimes of other countries. In relation to the latter, the needs of older people are provided for in different ways by other countries. The number of pensioners receiving pensions from other countries who are resident here is not known and it is therefore not possible to estimate the cost of paying the bonus to all pensioners in the country.

With regard to the UK, it is understood that a Christmas bonus is paid to their pensioners who are resident in the UK or in another EU country. In 2005 a bonus of £10 sterling was paid.

Photo of Michael LowryMichael Lowry (Tipperary North, Independent)
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Question 330: To ask the Minister for Social and Family Affairs his plans to remove spousal income from the means test for persons applying for or in receipt of disability allowance and carers allowance; if he has no such plans, his views on doing so; the annual estimated cost of such a change; and if he will make a statement on the matter. [24423/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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Disability allowance and carer's allowance are means tested social assistance payments. In the case of both schemes, account is taken, for means testing purposes, of the claimant's own means and, in the case of a couple, their joint means. In this regard, recipients of both disability allowance and carer's allowance are treated in the same way as recipients of all other social assistance payments. This ensures that resources are directed to those in greatest need.

The carer's allowance means test has been eased significantly in the past few years, most notably with the introduction of disregards of spouse's income. Provision was made in Budget 2006 to increase the income disregard on the carer's allowance means test to EUR290 per week for a single person and to EUR580 per week for a couple from April 2006.

This will ensure that a couple with two children can earn up to EUR32,925 per annum and still receive the maximum rate of carer's allowance. The same couple will be able to earn up to EUR54,400 and receive the minimum rate of carer's allowance as well as free travel, the household benefits package and the respite care grant.

Complete abolition of the means test would cost an estimated EUR140 million in a full year.

In Budget 2006, I was also pleased to be able to announce a number of significant and focused improvements to the assessment of spouse's income for a range of means tested schemes, including disability allowance, as follows:

—the spouse's income threshold for entitlement to the full rate of qualified adult allowance increases, from September next in the case of disability allowance, from EUR88.88 to EUR100 a week. The upper income threshold for entitlement to a reduced rate of qualified adult allowance was increased by EUR20 per week to EUR240 per week with effect from last January and this will further increase to EUR250 from the end of September.

—he spouse's income disregard for means testing purposes also will increase from EUR88.88 to EUR100 a week from next September.

It is not possible, at this stage, to estimate the cost of disregarding all spousal income in the case of disability allowance.

I am always prepared to consider changes to existing arrangements where these are for the benefit of recipients and financially sustainable within the resources available to me. Those recommendations involving additional expenditure will be considered in a budgetary context.

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