The old age non-contributory pension is a social assistance scheme which is designed to provide financial support for older people who do not qualify for one of the contributory pension schemes. In common with other social assistance schemes the OANCP features a means test which is intended to ensure that available resources are targeted at those who are most in need. The operation of the means test is kept under review and changes are made as required.
In October 2000, a new method of capital assessment for most means-tested schemes, including OANCP, came into operation. Under the new method the first £10,000 of capital is disregarded, capital between £10,000 and £20,000 is assessed on the basis of £1 weekly means for each £1,000 of capital, capital between £20,000 and £30,000 is assessed on the basis of £2 weekly means for each £1,000 of capital and capital above £30,000 is assessed on the basis of £4 weekly means for each £1,000 of capital. The new system is designed to ensure that those with modest amounts of capital receive the greater share of available support. These limits are doubled in the case of a married couple. Any further changes to the scheme would have to be considered in a budgetary context.
In the Review of our Action Programme for the Millennium, the Government reaffirmed its commitment to caring for our older people by committing itself to increasing the old age non-contributory pension to £100 per week by 2002. We are well on the way to achieving this target with very significant increases granted over the last four budgets. In budget 2001, further significant progress was made towards achieving this goal following significant increases in social welfare pension rates. With effect from 6 April 2001, the personal rate of old age non-contributory pension was increased to £95.50 per week. This represents an overall increase of £28 per week for this scheme since this Government took office. These measures reflect the emphasis I have placed on improving the personal pension rates of our older people which I believe is the most effective and equitable way of ensuring that their position is improved.