Welfare recipients who hold SSIAs could have their entitlements curtailed when their policies mature, it has emerged.
The Department of Social Welfare intends to treat proceeds from the special savings accounts as any other form of income when assessing payments.
The position was confirmed in a written response to a parliamentary question submitted by the Labour Party's consumer affairs spokesperson, Ms Kathleen Lynch, to the Minister for Social Welfare, Mr Brennan, last week.
"Considering the extent to which the Government promoted the SSIA scheme and encouraged everybody to open an account, it is ridiculous that those who need this money most will have their welfare payments affected when their accounts mature," said Ms Lynch.
"Presumably those on social welfare who took the Government's advice and opened accounts have only been able to deposit minimal sums. I doubt if many were aware that by putting money away for the future they would be jeopardising their welfare entitlements down the road," Mr Lynch added.
She said she was alerted to the potential problem by a lone-parent constituent who receives benefit. The constituent's parents set up an account on her behalf. "As a result of her parents looking after their child, her benefit could be affected."
In the response to Ms Lynch's parliamentary question, Mr Brennan said money SSIAs are treated as capital in the same way as savings certificates, bonds, stocks and shares.
"In assessing means for social assistance purposes, account is taken of any cash income the person may have, together with the value of capital and property. Any money held in SSIA accounts are treated in the same manner as all other capital," Mr Brennan wrote in his reply.