Means testing non-contributory pension

Dear Money Mentor,

I am emailing you on behalf of my parents, further to the recent article you had in the Irish Farmer’s Journal about a lady who had been receiving a pension which had been means tested and where she had an increase in income.

This raised a question with my own parents. I will outline their case and maybe you could assist or put them in the direction of somebody that would be able to advise them.

When my father reached 66 in 2003, he received a contributory pension. At the time, my mother was put down as a qualified person (dependent) and received a payment. She was not means tested. When my mother reached 66 in December 2011, she received an increase in January 2012, again no mention of a means test.

The concern we have now is my parents had a change in circumstances in the second half of 2006, when they sold some land, and the proceeds would have given my mother a considerable income, as she was joint owner. We are concerned now, having read your article, as to what the situation is. At no time was she ever asked to complete a means test.

We would appreciate any help or recommendation you might be able to give.

Ann

Dear Ann,

In 2003, your parents must have completed the means test page on the application form for your dad’s state pension.

Your dad was means tested, but your mother was not, otherwise she would not have received this allowance. In 2011, she got the regular increase that all adult dependants get when they reach 66. This is exactly the situation highlighted in the article.

Your mother might have declared half ownership of the land in 2003. But when the land was sold at 2006 prices, her circumstances did change and it seems she did not inform the Department of Social Protection.

The Department clearly states you need to contact Social Protection if there is a change in the financial circumstances of your qualifying adult. This might not be good news, but maybe it is better to address it now, rather than later.

Succession planning and agricultural relief

Dear Money Mentor,

I read with interest your recent article in the Irish Farmer’s Journal regarding succession planning. I hope you can assist with a query I have. My father recently passed away, leaving a large farm to my mother.

She is keen to ensure the farm is, in turn, passed 50-50 to me and my sister, minimising the tax implications. The three of us are now directors in the farm business and, while I am keen to keep the enterprise running and put the time in, I have a full-time job in a non-farming sector.

In your article you reference three criteria to qualify for agricultural relief. If we take it that my assets will be below the threshold, under the 80% rule, and that I will farm the land or lease it for six years, do I qualify for agricultural relief?

You mention that the other criteria is an agricultural qualification. I have been informed by two separate sources (agricultural advisers) that I do not need an agricultural qualification to avail of agricultural relief. Can you advise on the ins and outs of this rule? My sister has an agricultural qualification, so there should be no issue there.

Fred

Dear Fred,

As well as the two criteria to be a qualified farmer (with the right qualifications) or lease the land to an active farmer/qualified farmer, you can also get agricultural relief by being an active farmer.

If you do not have an agricultural qualification, you must farm the agricultural property for at least 50% of your normal working time.

Revenue will accept, for the purposes of this relief, that a person’s normal working time (including on-farm and off-farm working time) approximates to 40 hours per week. Therefore, farmers with off-farm employment may qualify for agricultural relief where, averaged over a year, they work on the farm for at least 20 hours per week.

You might squeeze under this. You could take the business relief option, or the fact that you are directors in the company could open up the transfer of shares. It is important to get good tax and company law advice on this.

Widow’s pension

Dear Money Mentor,

Just a question, Peter, after reading the Journal dated 15 July. I read your article and in it you said to the lady’s query that if her husband died she would get a widow’s pension of €238.

Why am I getting €198.50 a week after becoming a widow in March of 2016, when my husband was taken from me a little suddenly with cancer and he farmed all his life with me by his side and paid his stamps since they came into being for farmers?

I would like an explanation to my question, please, or am I missing something that I don’t understand?

Thanking you for your time,

Mary

Dear Mary,

Sorry to hear about your husband’s death. The answer is that the rate if you are under 66 is €198 per week. When you reach 66 you will get an increase to €238. CL