Government Departments will take different approaches in deciding whether to include interest generated by Special Savings Incentive Accounts (SSIAs) when determining eligibility for medical cards, social welfare payments and education benefits.
While welfare benefits will remain unaffected by SSIA funds, the interest generated will be taken into account when calculating eligibility for medical cards and education grants.
The discrepancies are likely to renew opposition criticism that people on low incomes unwittingly invested in the Government's SSIA scheme without knowing they could lose medical or education benefits.
The five-year SSIA saving schemes are due to mature in 2006 and 2007, depending on when investors opened their accounts.
The Minister for Social and Family Affairs, Mr Brennan, said welfare rules would be changed to disregard SSIA assets in calculating eligibility for social welfare payments.
Claimants in future will be allowed to have up to €20,000 in savings for means-tested payments instead of the old maximum of €12,694.
The maximum a person can generate in savings under the SSIA savings scheme is €19,000 - below the new threshold.
Mr Brennan said these measures would remove the anxiety of many welfare recipients, particularly old-age pensioners, who were worried that their SSIAs would impact on the value of their pensions.
However, a spokesman for the Department of Health said interest on SSIA schemes, along with other investment income, would be taken into account in means testing for medical cards.
The Department says it does not expect any medical card patients will be adversely affected by assessing interest generated by SSIA schemes.
There is also a long-standing practice that health boards may grant medical cards on a discretionary basis to patients who did not qualify on income grounds.
On the free GP and drugs scheme, however, the Department said capital invested by an individual or the Government's 25 per cent contribution towards the SSIA scheme would not be assessed for eligibility.
The Department of Education has confirmed that interest generated by SSIA schemes would be used, along with other earnings, in calculating eligibility for higher education grants. A spokeswoman was unable to say if research had been conducted to determine how many people could be affected by the practice.
The Department of Social and Family Affairs stance on not including SSIA interest followed research commissioned by Mr Brennan. Officials estimated that around 5,000 older people were likely to see a reduction in the size of their pensions if SSIA savings were included in determining welfare eligibility.
Officials say the cost of extending the thresholds will not be "enormously expensive". The Department was also aware of potential political damage likely to arise if a number of pensioners faced being "penalised" for investing in SSIA schemes.
Under the changes, a single non-contributory pensioner may have savings of €27,600 and still qualify for a pension at the maximum rate. This rate is based on the past practice of allowing pensioners a further €7,600 in savings, on top of the maximum allowable to other claimants.
