Eamon Scanlon (Sligo-Leitrim, Fianna Fail)
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726. To ask the Minister for Social Protection if she is satisfied that the current means testing for self-employed persons seeking the State pension (non-contributory) is operating to standards that are fair and equitable; if she will review the means-test condition with regard to cash income for the State pension (non-contributory) in view of the difficulty it is posing for some persons, particularly the self-employed, women and farmers; and if she will make a statement on the matter. [32072/17]

Regina Doherty (Meath East, Fine Gael)
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Self-employed people pay PRSI at the class S rate of 4% and are covered for certain social insurance benefits and pensions, including the State pension (contributory). Employees and the self-employed who reach 66 years and who do not satisfy the conditions for entitlement to the State pension (contributory) are eligible to apply for the State pension (non-contributory). In addition, it may be more advantageous for people who have an underlying entitlement to a reduced weekly rate of State pension (contributory) to apply for the State pension (non-contributory) as the weekly rate of the latter pension may be higher.

The State pension (non-contributory payment) is a means tested payment and the weekly rate payable is dependent on the means of each claimant. Account is taken in the means test of the value of property (other than the family home) and capital the person may have as well as cash income such as earnings from employment or self-employment, occupational pensions, foreign social security pensions and so on.

Where a claimant for the State pension (non-contributory) is in employment, a weekly earnings disregard of €200 per week applies. This disregard was intended to facilitate non-contributory pensioners who wish to continue working, or to re-enter the workforce. A similar disregard does not apply in the case of income from self-employment including income from farming.

However, it should be noted that the means assessment for the pension in question fully allows for “any expenses necessarily incurred in carrying on any form of self-employment ”. There is no exhaustive list of all expenses allowed in self-employed cases, since expenses vary with the nature and extent of the self-employment.

However, the following are the main allowable expenses in most instances, as set out in the means guidelines available on the Departmental website, www.welfare.ie/en/Pages/Means-Assessment.aspx:

- Materials (supplies costs)

- Motor running costs (portion applicable to business)

- Depreciation of machinery or equipment

- Insurance relating to the business

- Telephone (portion applicable to business)

- Lighting and Heating (for business and not domestic use)

- Advertising

- Bank Charges

- Stationery

- Labour Costs

- Any other costs associated with running the business.

These arrangements apply to all self-employed claimants for the State pension (non-contributory) as well as other means tested welfare schemes. The rules applying to the State pension (non-contributory) do not prohibit individuals engaging in any form of self-employment; it is the means available from the net profit from such self-employment (after allowing expenses) which determines the rate of pension payable, if any.

It should also be noted that the first €30 per week means (from any source including self-employment) is disregarded for State pension non-contributory purposes (this amount is doubled in the case of a couple).

Furthermore, a farmer in receipt of the State Pension (non-contributory) can also benefit from the disregard that exists for certain farm payments administered by the Minister for Agriculture, Food and the Marine, such as the Agri-Environment Options Scheme. The first €2,540 of this and similar payments is fully disregarded, with 50% of the remainder assessed as means.

There are currently no plans to amend the means assessment for the State Pension (non-contributory) scheme. Any such changes to the current means testing arrangements for self-employed pensioners generally would have to be considered in the overall policy and budgetary context.