Dear Peter, I am an old-age pensioner in my 80s, widowed for many years. I was in farming before retiring. I have a pension of €125 a week. When my son got married, I sold land to buy a house. The old-age pension I had was taken off me. That was a few years ago and I understand it was correct at that time. But a lot of my savings have gone towards helping family etc and little or no bank interest in what I have left. I have no taxable income.
Thanking you.
Angela
Hi Angela,
There are too parts to your current problem. The first is the pension of just €125 a week, which at just €6,500 a year is very low. The second is your own assets/savings and what you have done with them since you retired
Your pension would only have been taken off you if you were getting a means-tested State pension. This is a payment for people aged over 66 who do not qualify for a State pension (contributory) or who only qualify for a reduced contributory pension based on their insurance record.
(I asked Angela to look at her PRSI records. She came back to me saying they show that she made PRSI contributions from 1988/89 to 1996/97 and 52 for each year. I assume she retired in 1997. That is just nine years of contributions, adding to 468 in total. It does not give her the 520 full-rate contributions that are required).
However, I’m sure you looked into that at the time. You also said the old-age pension was taken off you. This must have been due to the means test for the non-contributory.
Under the current rules, your means are assessed under the following headings:
Cash income (including income from work).Value of capital (for example, savings, investments, cash on hand and property but not your own home).Income from property personally used.Any cash income you have is assessed in the means test.If you own or lease land, your net income from farming or leasing is fully assessed with no disregards. The net income is worked out by deducting expenses incurred from the gross income. If you own land that is not productively used or leased, this is assessed on its capital value. Certain items of cash income are not taken into account in the means test. For example, earnings of up to €200 per week from employment (but not self-employment) are not taken into account.
Savings, investments, cash on hand and any property you own (but not your own home) is assessed, as capital. All your capital from different sources is added together and a special formula is then used to find your weekly means from capital.
The property and investments that may be assessed under this heading, include savings in a bank account, a house that you have let and stocks and shares. You may or may not be getting an income from the property or investment.
Your means under the various headings are added together to see what level of pension, if any, you can get. You can have savings or assets of up to €20,000 and earnings of up to €200 per week from employment and still qualify for a full State pension (non-contributory). The first €30 per week of means, as assessed by the Department of Social Protection, does not affect the rate of pension. After that, the pension is reduced by €2.50 each week for every €2.50 of means.
So, the question is: What assets do you still have? Do they still push you over the weekly amount? You can check this out by reapplying for the non-contributory pension. You can get an application form from your local social welfare office, post office or citizens information centre. You should send your completed application form to Department of Social Protection, Social Welfare Services, College Road, Sligo.
The second element is what you have been doing with your savings. In some ways, you have been too kind by giving a lot of savings to help family. I have come across this a lot, as people who retire don’t realise how much they need, especially as, like yourself, they are healthy well into old age. This has become a greater issue with the current low interest rates on savings.
Too often, retired people don’t want to eat into their capital. There comes a stage when it can be done. As the saying goes, you can’t take it with you. The other issue to remember is, if you do need to go into a nursing home, any assets outside the family home will be quickly eaten into under the Fair Deal scheme.
I would also have this conservation with your family. I know it could be difficult, but any one of them can gift you €3,000 a year tax-free. Even a small amount a week would make a big difference. After all, you deserve not to be worried about money at this time of your life, especially as you have been so kind with your money towards others.
Dear Peter, I am an old-age pensioner in my 80s, widowed for many years. I was in farming before retiring. I have a pension of €125 a week. When my son got married, I sold land to buy a house. The old-age pension I had was taken off me. That was a few years ago and I understand it was correct at that time. But a lot of my savings have gone towards helping family etc and little or no bank interest in what I have left. I have no taxable income.
Thanking you.
Angela
Hi Angela,
There are too parts to your current problem. The first is the pension of just €125 a week, which at just €6,500 a year is very low. The second is your own assets/savings and what you have done with them since you retired
Your pension would only have been taken off you if you were getting a means-tested State pension. This is a payment for people aged over 66 who do not qualify for a State pension (contributory) or who only qualify for a reduced contributory pension based on their insurance record.
(I asked Angela to look at her PRSI records. She came back to me saying they show that she made PRSI contributions from 1988/89 to 1996/97 and 52 for each year. I assume she retired in 1997. That is just nine years of contributions, adding to 468 in total. It does not give her the 520 full-rate contributions that are required).
However, I’m sure you looked into that at the time. You also said the old-age pension was taken off you. This must have been due to the means test for the non-contributory.
Under the current rules, your means are assessed under the following headings:
Cash income (including income from work).Value of capital (for example, savings, investments, cash on hand and property but not your own home).Income from property personally used.Any cash income you have is assessed in the means test.If you own or lease land, your net income from farming or leasing is fully assessed with no disregards. The net income is worked out by deducting expenses incurred from the gross income. If you own land that is not productively used or leased, this is assessed on its capital value. Certain items of cash income are not taken into account in the means test. For example, earnings of up to €200 per week from employment (but not self-employment) are not taken into account.
Savings, investments, cash on hand and any property you own (but not your own home) is assessed, as capital. All your capital from different sources is added together and a special formula is then used to find your weekly means from capital.
The property and investments that may be assessed under this heading, include savings in a bank account, a house that you have let and stocks and shares. You may or may not be getting an income from the property or investment.
Your means under the various headings are added together to see what level of pension, if any, you can get. You can have savings or assets of up to €20,000 and earnings of up to €200 per week from employment and still qualify for a full State pension (non-contributory). The first €30 per week of means, as assessed by the Department of Social Protection, does not affect the rate of pension. After that, the pension is reduced by €2.50 each week for every €2.50 of means.
So, the question is: What assets do you still have? Do they still push you over the weekly amount? You can check this out by reapplying for the non-contributory pension. You can get an application form from your local social welfare office, post office or citizens information centre. You should send your completed application form to Department of Social Protection, Social Welfare Services, College Road, Sligo.
The second element is what you have been doing with your savings. In some ways, you have been too kind by giving a lot of savings to help family. I have come across this a lot, as people who retire don’t realise how much they need, especially as, like yourself, they are healthy well into old age. This has become a greater issue with the current low interest rates on savings.
Too often, retired people don’t want to eat into their capital. There comes a stage when it can be done. As the saying goes, you can’t take it with you. The other issue to remember is, if you do need to go into a nursing home, any assets outside the family home will be quickly eaten into under the Fair Deal scheme.
I would also have this conservation with your family. I know it could be difficult, but any one of them can gift you €3,000 a year tax-free. Even a small amount a week would make a big difference. After all, you deserve not to be worried about money at this time of your life, especially as you have been so kind with your money towards others.
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