Noel Harrington (Cork South West, Fine Gael)
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412. To ask the Minister for Social Protection the reason her Department applies an interest rate of 20.8% which is over 80 times the ECB rate of 0.25% on savings and investments and property over €50,000 on means tests administered by her Department; her plans to amend the scheme to reflect present interest rates; and if she will make a statement on the matter. [1736/14]

Joan Burton (Dublin West, Labour)
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In assessing means for social assistance payments, account is taken of the income and the value of capital and property of the claimant and their spouse / partner.

Social welfare legislation provides that the yearly value of property (including capital) owned but not personally used or enjoyed is assessable for means testing purposes for social assistance payments. Such property includes all monies held in financial institutions or otherwise, the market value of shares and houses and premises owned by a claimant which may or may not be put to commercial use. However, it does not include property such as the family home or, for example, a premises used by the claimant in carrying out a business.

For assessment purposes, the current market value of the property is established as well as the amount of any outstanding mortgages on that property. The balance (market value less outstanding mortgage) is assessed by reference to the following formula in the case of most schemes (including jobseeker’s allowance and one parent family payment), as follows:

Capital – Assessment Formula

For the purposes of the State pension non-contributory and carer’s allowance the amounts above are doubled in the case of a couple. The amount disregarded in the case of disability allowance is €50,000 while €5,000 is disregarded in the case of supplementary welfare allowance.

The assessment formula is not designed to reflect interest or annuity rates available to investors and no account is taken of interest or dividend payments received in the means assessment. The assessment formula reflects the fact that there is an expectation that persons with reasonable amounts of capital and property are in a position to use that capital or to realise the value of property to support themselves without having to rely solely on a means tested welfare payment.

Any changes to the current arrangements would have to be considered in a Budgetary context.