My father received the non-contributory pension for over 30 years. He is deceased and there is a house, a small piece of land and a car from 2018 with around €50,000 to his name. Should he have been a beneficiary of the non-contributory pension? Will you have to sell your estate to meet social charges?
Mrs. AS, e-mail
Your father clearly lived a long life and enjoyed state financial support for the past three decades. However, you are right to worry.
People who have not made sufficient contributions to social insurance (earnings-related social insurance, or PRSI, in Ireland) are not entitled to an automatic contributory state pension once they retire. This will have affected many people who were self-employed or farmers. However, depending on their income and other resources, they may be entitled to a non-contributory state pension.
This is payable up to a weekly rate of €242 for people of limited means over the age of 66. If still eligible, it can reach €252 once you reach the age of 80.
The key question is what are these limited means.
A resource test will assess all income with very limited exceptions. It will also look at any assets you own, including savings. Your father will have completed an application form when he first applied for a pension and he will have asked for the financial details necessary for the means test.
On the income side, the Department of Social Welfare will include all income except social benefits, most state allowances, and some state education and other financial aid. The full list is available here.
In your father’s case, I don’t think it will be relevant unless he has other welfare income.
You can also earn up to €200 a week through employment and still be eligible for the full weekly state non-contributory pension payment, although again I think it’s academic here.
Then you come to the assets. There are two important issues here in your father’s case. The first is his home, which is not taken into account in the means test, so it is one less concern. Of course, if someone rented all or part of their house, this income could be taken into account. Even then, the first €14,000 of rent is not taken into account. However, I don’t think it’s relevant to your father.
As far as savings are concerned, the means test for the state pension also does not take into account the first €20,000 of savings. This is where things could get tricky for you. After this €20,000 threshold, your father will have been assessed as having €1 weekly income for the next €10,000 (up to €30,000), €2 for €1,000 over the next €10,000 (up to at €40,000) and €4 for €1,000 on anything above.
In the case of your father, the €30,000 above the asset threshold will be considered to have brought in an income of €70 per week.
Now all this is not responsible. The department also ignores the first €30 per week of means before it impacts your weekly payment. After that, however, every €2,500 of resources will result in a €2.50 deduction from the pension payment.
In your father’s case, this means that at the time of his death, his weekly pension payment should have been €40 less at most – or €212 assuming he was 80 or over.
Of course, he may not always have had that $50,000 in savings, so you’ll need to calculate his savings balance and when it appeared to determine from when and how much he should have reported. And that’s the problem, it’s the responsibility of the person receiving the payment to notify the Department of Social Welfare when their situation changes. Account statements from the bank, cash register or post office should show you the progress of their savings.
I can’t say I’ve ever heard the department sue someone for the value of a modest car, but that doesn’t mean they can’t. It is, after all, an asset.
In relation to the land you say it is a small plot. If it was agricultural land, any income from it would be assessed. Otherwise, it really depends on the nature of the terrain.
There is no prima facie evidence to suggest 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 hadn’t informed the ministry of his change of pleas, then, yes, they can sue him for reimbursement. And since he is no longer there, they can come after his succession.
For people still alive, social assistance will consider one of three options: take repayment in one payment, require weekly or monthly repayments until the overpayment is repaid, or deduct an amount of any ongoing weekly payments to cover the bill.
When coming after an estate, it is no surprise that they are looking for the money that needs to be paid back in a lump sum.
Wellness is pretty diligent about it. I have seen them go after people for a single child support payment when the weekly child support payment was made before the next of kin managed to notify the department of their death.
The bottom line in your father’s case is whether he actually informed the authorities of his extra savings. If his pension was paid into a bank account, it should be fairly easy to see. Otherwise, it’s either a matter of contacting the department if you choose to do so, or waiting to see if they contact you.
Technically speaking, whoever executor has the duty to handle all unpaid debts and money owed to his estate, so it would be their job to make sure it’s properly sorted before any distribution to anyone who inherits his succession. If they are aware of potential liability and do nothing about it, they could find themselves sued later by the ministry.
Please send queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or email [email protected]. This column is a reading service and is not intended to replace professional advice