Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 207: To ask the Minister for Social and Family Affairs her views on a statement (details supplied); when her policy on SSIA savings and social welfare payments changed; and if she will make a statement on the matter. [20507/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The statement to which the Deputy refers is a press release issued by the then Minister for Social and Family Affairs on 14 February 2005 which announced details of changes introduced in the Social Welfare and Pensions Act, 2005. These changes included an improvement in the means test arrangements for all social welfare schemes (except supplementary welfare allowance) under which the amount of capital disregarded for means test purposes was increased, with effect from June 2005, to €20,000 from €12,697.38. The enhanced disregard applied to all capital regardless of where it is or was held, be it in a SSIA, a Credit Union, with An Post or any other account with a bank or other financial institution. The change was introduced following a review of the arrangements for the assessment of capital particularly as they related to SSIAs. The policy in relation to SSIAs and social welfare payments has not changed since 2005.

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 family 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 also assessed according to their current market value.

• Money invested in a bank, building society etc.

Capital amounts held in Special Savings Investment Accounts when such accounts existed were treated in the same manner as other capital. Following the closing of such accounts in 2007, capital formerly held in these accounts continues to be assessed for means tested purposes in the same manner as before. Currently, for the purposes of most social assistance schemes the first €20,000 of capital continues to be disregarded. The first €50,000 is disregarded in the case of disability allowance while the first €5,000 is disregarded in the case of supplementary welfare allowance.

Seán Fleming (Laois-Offaly, Fianna Fail)
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Question 208: To ask the Minister for Social and Family Affairs if people in receipt of disability allowance automatically become entitled to the contributory State pension; if this does not occur in some situations, if she will make arrangement to pay PRSI contributions in order that they will have an entitlement to the State pension; and if she will make a statement on the matter. [20511/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Eligibility for the State (Contributory) Pension is determined by an individual's PRSI contribution history. The standard qualifying conditions for contributory pensions require a person to enter insurance 10 years prior to pension age, pay a minimum of 260 contributions at the correct rate, and achieve a yearly average of at least 10 contributions on their record from the time that they enter insurance until they reach pension age. As signalled in 2002 and provided in the Social Welfare Acts, the minimum number of contributions required will increase from 260 to 510 from 2012.

Individuals in receipt of Disability Allowance are only eligible to apply for the State (Contributory) Pension, at age 66, if they started paying social insurance contributions before reaching the age of 56. They are not liable to pay PRSI contributions but may be eligible for credited social insurance contributions if they have paid at least one PRSI contribution and have paid or credited contributions in either of the last two income tax years before a claim was made for Disability Allowance. Credited contributions are only awarded to those people who were employed contributors, as opposed to self-employed contributors, reflecting differences between the nature of employment and self-employment.

Alternatively, individuals may be eligible to pay voluntary contributions in order to maintain their contribution record and subsequent entitlement to the State (Contributory) Pension. In order to be admitted to the voluntary contributions scheme, a person must have a minimum of 260 weeks of PRSI paid in either employment or self-employment and apply within 12 months of their past paid contribution. The requirement to have 260 paid contributions to gain access to the scheme is essential in that it ensures that the requisite number of paid contributions required is in place to establish a contributory pension entitlement.