Illness Benefit (10% of the total expenditure of the Fund in 2010)
We were provided with projected Illness Benefit amounts by Department of Social Protection from 2011-2015 and were given statistics on the number of claimants who were in receipt of the benefit for more than 2 years. For those in receipt of Illness Benefit for longer than 2 years we assumed that this was a closed population, declining over time. We therefore projected the number of recipients allowing for the probability of survival of this group of claimants.
For the individuals with claims of less than 2 years duration we were provided with the number of recipients of this benefit split by age and gender for 2010. This was used to calculate distribution rates (as a proportion of the labour force as opposed to general population, reflecting the qualification requirements) of those in receipt of Illness Benefit at each age, i.e. the number of people receiving the benefit at each age and gender, divided by the total labour force for that gender in 2010. These distribution rates were assumed to be constant for each future year, and were applied to projected labour force levels giving the number of claimants in each year by age and gender.
We allowed for additional expected numbers of 65, 66 and 67 year olds from 2014, 2021 and 2028 onwards respectively, by examining the incidence rates of 64 year old recipients as a proportion of the labour force and assuming the same rates would apply to those impacted by the pension reforms.
Invalidity Pension (7% of the total expenditure of the Fund in 2010)
The number of recipients of Invalidity Pension was projected to increase each year in line with labour force population changes (given the qualification conditions). We also allowed for the following expected new recipients:
Those who previously would have been in receipt of Illness Benefit, by examining the reduction in Illness Benefit beneficiaries projected each year to 2015 compared with the numbers expected had the incidence rates remained stable. A proportion of the reduced numbers of illness claimants were projected to move to invalidity status by trending the additional invalidity numbers due to this effect observed in 2011-2015.
Those aged 65, 66 and 67 year olds from 2014, 2021 and 2028 onwards respectively, by examining the trend in increasing incidence rates between the ages 60 - 64 year old recipients as a proportion of the labour force and assuming the trend continues for those aged 65 – 67.
Other (Injury Benefit, Carer’s Benefit, Medical Care and Disablement Benefit) (negligible portion of overall expenditure)
The number of beneficiaries is projected to increase each year in line with population changes and the benefit amount is expected to increase in line with real earnings growth.
5.4.1.5 Other
Children (child related payment) (negligible portion of overall expenditure)
Recipients of child-related payments are assumed to increase in line with projected future birth rates and expenditure is uprated for increases in real earnings growth.
Supplementary Payments Agencies and Miscellaneous Services
Household benefits package and Fuel Allowance (3% of the total expenditure of the Fund in 2010)
The Household Benefits package is a secondary benefit available with a range of social insurance and social assistance schemes. It is funded by the Fund only in respect of insurance based schemes12. It is available to all aged 70 or over without a means test and with no household composition rules (one package per household provided for the registered user of utilities). Applicants must be permanently residing in the State.
People aged 66-70 who are in receipt of qualifying payments such as SPC, Widow(er)’s and Surviving Civil Partner’s Contributory Pension, equivalent recognised foreign pensions or who satisfy a means test and who live alone or only with certain excepted people may also qualify.
Widow(er)s and Surviving Civil Partners aged from 60 to 65 whose late spouses / partners had been in receipt of the Household Benefits package and who live alone or only with certain excepted people may retain that entitlement.
People aged under 66 who are in receipt of qualifying payments (such as Invalidity Pension) and who live alone or only with certain excepted people may also qualify.
Fuel Allowance
The Fuel Allowance is a secondary benefit available with a range of social insurance and social assistance schemes. It is funded by the Social Insurance Fund only in respect of insurance based schemes13. It is a means tested weekly payment of €20 available for people on long term schemes such as SPC, Widows Pension (Contributory), Guardian's Payment
12
Household Benefits are also available for people in receipt of certain assistance payments including State Pension (Non-Contributory), Widows Pension (Non-Contributory), Carer's Allowance, Blind Person's Pension, Disability Allowance and One Parent Family Payment (if aged 66-70).
13
Fuel Allowance is also available for people in receipt of certain assistance payments including Disability Allowance, One Parent Family Payment, Blind Person’s Pension, Guardian's Payment (non-contributory), long term Jobseeker’s Allowance, Supplementary Welfare Allowance and some Employment schemes.
(Contributory) and Invalidity Pension. It is paid for 26 weeks from October to March each year.
We projected that recipient numbers of both Household Benefits and Fuel allowance would increase year on year in line with the change in the population aged 66 or over and that the amounts payable would increase each year in line with real earnings growth with an alternative of increases in line with the Consumer prices index examined.
Housing, Water, Electricity, Gas & Other Fuels comprised circa 17% of the overall CPI index at December 2011.
Administration Costs (3% of the total expenditure of the Fund in 2010)
As administration cost are a relatively small proportion of the total expenditure we have assumed as a practical expedient that they will increase in line with real earnings growth.