Michael Ring (Mayo, Fine Gael)
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Question 400: To ask the Minister for Social and Family Affairs if he will amend the €100 disregard of means from employment in respect of non-contributory pensioners and widows to include self-employment or farming income; if the disregard criteria is discriminatory against farming widows; and if he will make a statement on the matter. [30762/06]

Séamus Brennan (Dublin South, Fianna Fail)
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In the last budget, I announced a wide range of important measures for non-contributory pensioners, including farmers. These included: an increase of €16 per week (9.6%) for all non-contributory pensions, which means that significant progress has been made towards the achievement of the government's commitment to bring the basic state pension to over €200 per week by 2007; an increase in the fuel allowance by €5 per week (56%), from €9 to €14, and an increase in the over-80 allowance by €3.60 per week (also 56%), from €6.40 to €10.

I also announced that I proposed to establish, with effect from September last, a new pension scheme, to be known as the State pension non-contributory. This replaces the old age non-contributory pension and, for recipients aged 66 and over, blind pension, widower's pension, one parent family payment, deserted wife's allowance and prisoner's wife's allowance. This initiative will cost €20 million in a full year.

All these schemes currently feature a common means disregard of €7.60 per week, which has not increased since the 1970s. This general disregard is being significantly increased in the new non-contributory pension to €20 per week, an increase of €12.40 per week. Approximately, 34,000 pensioners who are currently in receipt of a reduced rate of payment will gain from this change, including many thousands of farmers and farming widows. Persons in receipt of the personal rate of pension will benefit by up to €12.50 per week while an additional 1,900 pensioners with a qualified adult will gain by up to €20.80 per week. These increases are effective from Friday 29 September.

The State pension (non-contributory) and the existing widow's and widower's non-contributory pension also has a specific additional earnings disregard of €100 per week where the pensioner is in employment i.e. working for an employer. This disregard is intended as an initial incentive to facilitate non-contributory pensioners who wish to continue working, or to re-enter the workforce. It means that the first €100 of weekly earnings will not be taken into account when assessing entitlement to the new pension.

The budget did not provide for the proposed disregard to apply to income from any other source such as self-employment including farming or rents from leasing property. Income from sources other than employment, including pensions and capital, is covered by the enhanced general means disregard of €20 per week referred to above. In contrast to persons in employment, any expenses necessarily incurred in carrying out any form of self-employment have always been 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.

It should also be noted that there are special arrangements for farmers participating in the REPS and SACS schemes. The first €2,540 of all income from these schemes is not assessable for means test purposes and 50% of any balance is assessed. Any expenses necessarily incurred to participate in these schemes are also disregarded.

By any standards, the levels of increases and revised means test arrangements announced in the budget were exceptional. Any further improvements such as the enhancement of disregards for farmers and others would have to be considered in a budgetary context.