Dáil Éireann Debate, Thursday - 15 January 2026
14. Deputy Edward Timmins asked the Minister for Social Protection if he will review and change the current penal and outdated means test calculation on land or savings on, for example, the old age pension (non-contributory); and if he will make a statement on the matter. [2894/26]
Amharc ar fhreagraThe purpose of the means test on certain welfare payments is to ensure that the State directs its limited resources towards those with the greatest need for income support.
The allocation of resources through means testing is an essential component of many social transfer systems, ensuring that available resources are redistributed effectively and targeted at those in the lower income deciles. Ireland's system of means testing has ensured our social protection system is targeted and is consistently one of the most effective in the EU at reducing poverty levels, with a poverty reduction effect of 62.7% in 2024.
In our social welfare system the means test examines both cash income (including income from work) and capital assets (that is savings and investments, including property). It is important to note that the value of a person's principal residence or home is never assessed as part of means tests.
The value of capital is assessed using a progressive formula. In the case of the non-contributory pension the first €20,000 of capital is disregarded entirely, meaning no assessment is applied to this portion. For the next €10,000 above this threshold, an assessment of €1 per €1,000 is applied. The subsequent €10,000 is assessed at a rate of €2 per €1,000. Any remaining balance above these amounts is assessed at €4 per €1,000. This ensures a progressive approach to capital means assessment for recipients of the non-contributory pension. Under this system people with capital assets of up to €111,000 - excluding the value of their family home - can still receive a partial pension payment.
While the case can always be made that the assessment of capital should be made more generous it also has to be recognised that any such change comes with a cost - a cost that is either borne by taxpayers or by the reduction in funds available to other essential state supports and services. Accordingly, while I would not rule out a change to means testing thresholds as part of future budgets such a change would need to be evaluated and considered within the broader context of the Programme for Government and the overall budgetary position.
ENDS
