FIANNA Fail has echoed a call from Muintir na Tire for the Government to examine the feasibility of waiving tax on elderly people's bank savings. The calls came following the second attack in a week on two elderly brothers in Co Wicklow.
Fianna Fail's social welfare spokesman, Mr Joe Walsh, said the elderly kept cash at home "because of the existing means testing systems and because of the penal rates of notional interest which are applied on savings by the Departments of Social Welfare and Finance."
Muintir na Tire national president Mr Jim Quigley had earlier called for the setting up of another task force to examine how elderly people could be encouraged to put their savings into financial institutions where they would be safe. This would be similar to the task force which sat last February to advise the Minister for Social Welfare on improving security for the elderly.
Mr Quigley said the new task force should examine the implications of allowing elderly people to deposit small sums - say of up to £10,000 - with banks without having to pay tax or lose any social security, pension or medical card entitlements.
He said elderly people often saved for their whole lives to pay for the cost of a nursing home or for a proper burial, and were suspicious that if they put their savings into a bank or other financial institution, they would be taxed or lose some of their entitlements.
"We have to get rid of the perception that money is being kept in their houses by such people," said Mr Quigley.
A spokeswoman for the Department of Social Welfare said people with a contributory pension could save as much as they wanted without their pension or other social welfare entitlements: generally being affected, with the exception of fuel allowances. A single person on a means tested pension could have nearly £3,000 in savings without being affected and a widow could have £5,400. With larger amounts of savings, entitlements would be decreased on a sliding scale.
The director general of the Irish Bankers Federation, Mr Jim Bardon, outlined the ways in which elderly people could deposit their money safely in a bank at present.
They could put it in a safe custody box or a current account, where it would earn no interest but also would not have to be declared to the Revenue Commissioners.
Alternatively they could open a special savings account, which would necessitate them filling out a form with personal details and declaring the account to the Revenue Commissioners, who would deduct 15 per cent of any interest earned in tax. Or they could open an ordinary deposit account without filling in a form and pay 27 per cent tax on any interest.
A spokesman for the Revenue Commissioners said that any change in the taxing of elderly people's savings would be a matter for the Department of Finance.
"It's a policy making decision and it would require a change in legislation," he said. "It wouldn't be in our scope unless legislation was brought in.