Written answers

Thursday, 29 January 2009

Department of Social and Family Affairs

Social Welfare Code

4:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 127: To ask the Minister for Social and Family Affairs the arrangements, when there is a sharp appreciation of the euro, to allow for a review of the means of claimants who are in receipt of a pension or social security payment from a non-eurozone country and a reduced rate allowance payment from her Department; the way the rate is set in respect of sterling; the regularity with which it is reviewed; and the rate that is currently being applied by her Department. [2887/09]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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In assessing means derived from payments received from EU Member States (including U.K.) which do not form part of the EMU currencies, the Department uses the conversion mechanism provided for under Article 107 of Council Regulation (EEC) No. 574/72 on Social Security for Migrant Workers. The exchange rates for converting Sterling and other non-EMU currencies are published quarterly in the Official Journal of the European Union.

Under this mechanism the conversion rate used for means testing purposes is derived from the average of the daily exchange rates in the first month of a quarter. This rate is then used in all conversions during the course of the succeeding quarter. Alternatively the conversion rate applicable to the next succeeding quarter is used if it is more beneficial to the customer. When reviewing customers who are in receipt of British pensions the exchange rate used to convert Sterling is the rate applicable to the second quarter (i.e. the quarter in which the British pension increase occurred) or the third quarter if that is more beneficial. The Department does not generally review claims specifically because of movements in exchange rates. However, it is open to any pensioner who believes they may be entitled to an increase in the rate of their State Pension (Non Contributory) payment to seek to have their means reviewed.

It should be noted that changes in the value of a British pension, due to currency fluctuation, may well be offset by annual increases in the rate of those pensions and consequently the customer's State Pension (Non Contributory) payment may be unchanged or even reduced as a result of a review. The exchange rate for Sterling to Euro currently being applied by the Department is £1= €1.27116.

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