Written answers

Thursday, 24 November 2016

Department of Social Protection

Social Welfare Benefits Eligibility

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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132. To ask the Minister for Social Protection the details of the imputed rate of interest used by his Department and in respect of eligibility to different means tested schemes that fall under its remit; and if he will make a statement on the matter. [36696/16]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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In assessing means for social assistance payments, account is taken of the income and the value of property of the claimant and his or her spouse/partner, where applicable. 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. Such property includes all monies held in financial institutions or otherwise, the market value of shares as well as 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 a person is personally using or enjoying i.e. residing in or, for example, a premises used by the claimant in carrying out a business.

The current market value of the relevant property is established (having regard to local property prices) as well as the amount of any outstanding mortgages on that property. The balance (market value less outstanding mortgage) is assessed by reference to a notional formula.

The current assessment method, involving a disregard of an initial amount of capital and an increasing notional weekly value for amounts in excess of the disregarded amount, applies for most welfare schemes.

The assessment formula is not designed to mirror or impute potential interest or annuity rates available to investors or potential rental income from a property and no account is taken of any such income in the overall means assessment. The formula reflects the policy of ensuring that those with property and capital of modest amounts of capital receive the greater share of available support while those with larger amounts avail of it to contribute, at least partially, towards meeting their needs. This approach is one of the key elements of a means-tested income support system.

This property/capital formula also applies where a person has other types of property (including capital such as monies held in financial institutions or otherwise or the market value of shares).

The assessment formula for most schemes, including jobseeker’s allowance, farm assist and one-parent family payment, provides for €20,000 of capital to be disregarded.

AMOUNT OF CAPITALWEEKLY MEANS ASSESSED
Up to €20,000Nil
€20,000 - €30,000€1 per each €1,000
€30,000 - €40,000€2 per each €1,000
Over €40,000€4 per each €1,000

For the purposes of the State pension non-contributory and carer’s allowance the amounts above are doubled in the case of a couple. Social welfare legislation provides that €50,000 can be disregarded for disability allowance claimants, and €5,000 in the case of supplementary welfare allowance claimants.

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

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