Éamon Ó Cuív: Critiques Means Test Impact on Dependent Pensioners
Éamon Ó Cuív criticised the means-test for the contributory state pension increase for a qualified adult, arguing it can penalise couples' lifetime savings and those who follow advice to use joint accounts. He set out how means assessments treat income, pensions, savings and jointly held assets and highlighted specific thresholds and anomalies.
Means-test overview
He explained that recipients of the contributory state pension may claim an increase for a qualified adult - the spouse, civil partner or cohabitant who has been wholly or mainly maintained by the pensioner - but that this qualified adult increase is subject to a means assessment.
How means are assessed
He described that the means assessment includes income from employment or self-employment, non-social welfare pensions, and the capital value of savings, investments and property other than the family home. He noted the value of the family home is never taken into account and that where assets are held jointly the spouse or partner's means is taken to be half of the total amount.
Payment thresholds and entitlement
He outlined the thresholds used in the assessment - the maximum increase is payable where the partner's means are €100 a week or less; reduced rates apply where means are over €100 and less than €310; and no increase is payable where means exceed €310. He emphasised that the contributory state pension personal rate itself is not means-tested and entitlement is based on social insurance record.
Anomaly with savings and account arrangements
He highlighted examples in which couples who saved over £150,000 can have the dependent adult allowance decreased, and pointed to an anomaly where placing savings in a single account might avoid a reduction while jointly held accounts lead to a cut. He criticised that advice to use joint accounts when one partner earns is effectively penalised by the current arrangements.
Interruption and closing remark
His remarks were interrupted by repeated addresses to "Governor Michael" and he closed by saying "The talk has overtaken us", signalling the debate was curtailed before further discussion of the issues.
We publish thousands of recordings to make Irish politics transparent and resistant to manipulation. Spotted an error? Report it — together we are building a reliable archive of Irish politics.
There is a situation arising, and has arisen, where couples who have worked a lifetime, and where one was the primary earner and the other stayed at home to rare families and maybe cared for loved ones and so on, and are in receipt of the contributed pension and a dependent adult allowance or an IQA as they call it in the jargon. Now, we take one couple, they save money, they maybe get a lump sum at the end of employment, they might have got a legacy, and they put it in the primary earner's bank account. The other couple put it in joint bank accounts. Now, in that situation, if the savings of a lifetime go over £150,000, the dependent adult allowance is decreased. If they put it in the single bank account, which nobody would recommend, they get the whole lot. Recipients of the contributory state pension can claim an increase in their pension in respect of a qualified adult subject to a means assessment. A qualified adult is the spouse, civil partner or cohabitant of the pensioner who has been wholly or mainly maintained by that pensioner. The means assessment reflects the fact that there is an expectation that people with reasonable amounts of income or capital are in a position to use these resources to support themselves so that social welfare expenditure can be directed towards those most at need. Entitlement to the contributory state pension is based on a person's social insurance record and the personal rate of payment is not subject to a means test. Only the spouse or partner of the claimant is means tested. An increase is payable at the maximum rate of payment where the means of the spouse or partner are €100 a week or less, while reduced rates are payable where the means are over €100 and less than €310 per week. No increase is payable where the means is payable where the means of the spouse or partner are in excess of €310 per week. The means assessed include income from employment or self-employment, non-social welfare pensions and the capital value of savings, investments and property other than the family home. It should be noted that the value of the family home, regardless of who is the legal owner, is never taken into account in this assessment. Where savings, property or other assets are held jointly, the spouse or partner's means is taken to be half of the total amount. It is a matter for each couple to decide how their finances are arranged and the Department has no role in this. The current means testing arrangements are based on the actual means of the spouse or partner at any given time. Governor Michael. I am sorry, we cannot... Governor Michael. I am sorry, we cannot... Governor Michael. I am sorry, we cannot... Governor Michael. Just one minute in judgment. Governor Michael. In 30 seconds. Governor Michael. Minister, society always recommends that where there is one earning or the other, they would share joint accounts. And that the primary earner would not control all the finances. And then we say that is fine, you have followed our advice and now we cut you for doing what we advise you to do. The talk has overtaken us. Thank you very much. The talk has overtaken us. Governor Michael. Thank you very much. Governor Michael. Thank you very much. The talk has overtaken us. And we now...
Thank you for downloading 🙏
If you publish this material on social media, we would be very grateful if you tagged VideoParliament. It helps us reach more people and keep building a transparent archive of Irish politics.
