Éamon Ó Cuív: Calls for Radical Reform of Means Testing
Éamon Ó Cuív pressed the minister on means-tested social welfare schemes and called for urgent, radical reform. He highlighted anomalies in how income and assets are treated, particularly for disability allowance, carers allowance, non-contributory pension and incentives to work.
Work already carried out
The Department has carried out extensive work on means-tested policies over the past year and keeps means tests under regular review. The minister stated that a number of significant changes have been made, including higher income disregards so that some earnings are not assessed against social assistance payments. The minister also said they introduced a higher earnings disregard for disability allowance and blind pension and significantly increased the income disregard for carers allowance.
Specific reviews and changes reported
The minister referred to commitments in the programme for Government and in the Rural Development Policy 2021-2025 and noted a recent review of the means assessment disregards for the pharmacist, with a report available on the Government's website. A key recommendation was to expand the list of agri-environmental schemes that qualify for a disregard, a change introduced with effect from June 2022. The minister also agreed to review how income from land leased out by farmers is treated in the means assessment for the State's non-contributory pension and pharmacist scheme.
Anomalies raised by Éamon Ó Cuív
Ó Cuív outlined multiple anomalous outcomes he wants addressed: cases where a person on disability allowance loses the payment after inheriting assets while siblings face no penalty, differences when couples use joint versus single bank accounts for a dependent adult, and the treatment of self-employment income. He highlighted that for someone on "job seekers alone" 100% of self-employment income is deducted, and that a non-contributory pensioner can earn €200 a week and keep the full pension if in PAYE employment, but self-employment income is deducted.
Ministerial response and next steps
The minister said he has listened, has made changes, and is open to further suggestions from Ó Cuív. He accepted the point about anomalies and confirmed he will examine the list of proposals provided by Ó Cuív in the context of the budget. The Department will continue to monitor and review means assessment policies with a stated aim of supporting vulnerable people and targeting assistance to those on low incomes.
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Minister, as you know I have raised time and time again the whole issue of means testing and I was wondering what work has been done in the last year to review the various mean-tested schemes, to make them more equitable and also to increase the incentive to work. So you might outline to me what has been going on and you know we have discussed this matter a number of times and that I really believe that we need urgent and radical reform here. Goanamayagat, Deputy. My Department has carried out a large amount of work in relation to the policies surrounding means-tested schemes over the past year and I have also made commitments in relation to further reviews. Means tests are kept under a regular review and a number of significant changes have been made in recent years. In particular, I have introduced a number of changes to means testing which provide a higher higher income disregards for higher income disregards. These disregards ensure that where people are in receipt of a social assistance payment and are working, a certain level of income from that work is not assessed in the means test. On foot of the commitment in the programme for Government and in the Rural Development Policy 2021-2025, my Department recently reviewed the means assessment disregards for the pharmacist. The report is available on the Government's website. One of the key recommendations of the report was to provide for an extensive expansion to the list of agri-environmental schemes that qualify for a disregard, a policy which I introduced with effect from June 2022. In addition, I have agreed to carry out a review of how income from land leased out by farmers is treated in the means assessment for the State's non-contributory pension and pharmacist scheme. I introduced several measures which aim to encourage and support people with disabilities to pursue their employment goals. This included a higher earnings disregard for disability allowance and blind pension. I also significantly increased the income disregard for carers allowance. This enables more carers with modest incomes to become eligible for the scheme and allows carers and their families to earn more from employment while retaining their carers payment. My Department will continue to monitor and review policies for all social welfare payments, including means assessments. You and I have discussed this and I have been listening to you and I have made changes and I know that you have further ideas around more changes and I am happy, as always, to discuss and to talk to you about it. One of those changes related to people who are severely disabled from birth and will allow that the parents to die and leave their estate to their children. The family home is sold. So we say that they leave 200,000 to each of the children. In the case of the person in receipt of disability allowance, what will happen once they receive that is that they will lose the disability allowance in total. Now, I don't think that is equitable or fair or just, whereas the siblings who don't have a disability would get their money totally free of tax and there would be no penalty. You also have the situation where you have a couple with a dependent adult and a one-income family. In one case they put it into joint bank accounts, in the other case they put it only into the income earners' bank account. Reality is then that in the first case they are means tested on the increase for the qualified adult. There is any amount of examples. They are totally anomalous and they need to be reformed. Thank you Deputy Minister. You and I have discussed a few of these. You have raised that issue where somebody is on disability allowance and their elderly parents have been living frugally so they can leave an asset behind when they pass on to their disabled child and then they find that when they have this asset, save for savings or whatever it impacts. I take the point you are making and as I said, I have made some improvements and I am certainly looking at the suggestions you gave me. In fact, you gave me a list of proposals and I will look at those in the context of the budget because there are anomalies there and we would like to try and help people because that is what the Department of Social Protection is here to do. It is to try to support people and particularly target those who are vulnerable and those on low income. As I said to you, there has been a lot of changes made but I am happy to look at more of the suggestions. In relation to incentive to work, you have the situation where if somebody who is self-employed is on job seekers alone, 100% of the income from self-employment is deducted from the job seekers alone. You have the other situation that I find totally anomalous that if you are a non-contributory pension you can earn €200 a week and receive the full pension. But if you get that from self-employment it is deducted from the pension and there is no logic for having such a difference between self-employment, farming or fishing and employment in PAYE employment. The Department has carried out numerous reviews of policies surrounding the means test schemes over the past year and at the suggestion for yourself, as I said, you gave me a list of suggestions and a commitment in the programme for government and in the rural development policy to review means assessment disregards for the pharmacist as you know has been completed. A key recommendation from this review was to extend the list of agri-environmental schemes that qualify for disregards. We have made some changes and we will continue to look at these issues and do whatever we can to assist people.
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