My Dad received the non-contributing pension for over 30 years. He passed away and there is a house, a small amount of land and a 2018 car along with approximately €50,000 in his name. Should he have being receiving the non-contributing pension? Will his estate need to be sold to meet expenses to social welfare?
Ms A.S., email
You father clearly lived a long life and had the comfort of State financial support in those final three decades. However, you are right to be concerned.
People who have not paid enough social insurance (pay-related social insurance, or PRSI, in Ireland) are not entitled to an automatic contributory State pension once they retire from work. This will have affected a lot of people who were self-employed or farming. Depending on their income and other means, however, they may be entitled to a non-contributory State pension.
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This is payable up to a weekly rate of €242 for those of limited means over the age of 66. If still eligible it can rise as high as €252 once you hit the age of 80.
The key question is what are those limited means.
A means test will assess all income with very limited exceptions. It will also look at any assets you have, including savings. Your father will have filled out an application form when he first applied for the pension and it will have sought the financial details necessary for the means test.
On the income side the Department of Social Protection will include all income with the exception of welfare payments, most State compensation payments and certain State education and other financial supports. The full list is available here.
In your father’s case I don’t think this will be relevant unless he had other welfare income.
You can also earn up to €200 a week from a job and still be eligible for the full weekly non-contributory State pension payment, though, again, I think this is academic here.
Then you come to assets. There are two important issues here in your father’s case. The first is his home, which is not taken into consideration under the means test, so that is one worry less. Of course, if someone was renting out all or part of their home that income could be considered. Even then the first €14,000 of rent is disregarded. However, I don’t think this is relevant to your father.
In relation to savings the means test for the State pension also disregards the first €20,000 in savings. This is where things could get tricky for you. After that €20,000 threshold your father will have been assessed as having €1 in weekly income for the next €10,000 (to €30,000), €2 per €1,000 on the next €10,000 (to €40,000) and €4 per €1,000 on anything above that.
In your father’s case the €30,000 over the asset threshold will be considered to have been yielding income of €70 a week.
Now, not all this is liable. The department also ignores the first €30 a week of means before it impacts your weekly payment. After that, however, every €2,500 of means will mean a €2.50 deduction in pension payment.
In your father’s case this means that when he died his weekly pension payment should have been €40 below the maximum – or €212 assuming he was 80 years of age or more.
Of course, he might not always have had this €50,000 in savings so you would need to work out his savings balance and when it arose to figure out from when and how much he should have been declaring. And that’s the thing, it is the responsibility of the person receiving the payment to notify the Department of Social Protection where their circumstances change. Bank, credit union or post office account statements should show you the progression of his savings.
I can’t say I have ever heard the department pursuing someone over the value of a modest car, but that’s not to say they can’t. It is, after all, an asset.
In relation to the land you say it is a small plot. If it was farmland any income deriving from it would be assessed. Otherwise it really depends on the nature of the land.
There is nothing on the surface to say that your father was not punctilious in his dealings with welfare and that everything is as it should be. But if your father was claiming more than he should have and had not informed the department of his changed means, then, yes, they can come after him for repayment. And as he is no longer here they can come after his estate.
For people who are still alive welfare will look at one of three options – taking the repayment as a single payment, requiring weekly or monthly repayments until the overpayment is paid back, or deducting an amount from any ongoing weekly welfare payments to defray the bill.
When they come after an estate not surprisingly they will look for any money due to be repaid as a lump sum.
Welfare are pretty assiduous about this. I have seen them come after people for a single pension payment where the weekly pension payment has been made before next of kin get around to notifying the department of their death.
The key thing in your father’s case is whether he had in fact notified the authorities of his additional savings. If his pension was paid into a bank account it should be pretty easy to see. Otherwise it is a case of either contacting the department if you choose to do so or waiting to see if they contact you.
Technically speaking whoever is the executor has a duty to manage all outstanding debts and money owed to his estate, so it would be incumbent on them to make sure it is properly sorted before any distribution was made to anyone who is inheriting from his estate. If they are aware of a potential liability and do nothing about it they could find themselves pursued later by the department.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice
