Social welfare legislation provides that the means test takes account of the income and assets of the person (and spouse/partner, if applicable) applying for the relevant scheme. Income and assets include income from employment, self-employment, occupational pensions, maintenance payments as well as property owned (other than the family home) and capital such as savings, shares and other investments. The assessment of capital reflects the fact that there is an expectation that people with reasonable amounts of capital and property are in a position to use that capital or to realise the value of property to support themselves without having to rely solely on a means-tested welfare payment.
In the assessment of property, all second homes must be capable of being sold, let or put to profitable use before a capital value assessment is applied. If a property is let, the capital value of the property is assessed and the income from the letting is not assessed. Any outstanding mortgage registered against the property is deducted from the market value to find the capital value.
If a person leaves their home due to old age or incapacity, either on a temporary basis or indefinitely, the value of their home will not be assessed as means. However, if it is put to profitable use (for example, rented out), the capital value of the house will then be assessed as means.
The formula for assessing means from capital for all social welfare payments (except Disability Allowance and Supplementary Welfare Allowance) is as follows:
Capital
|
Weekly means assessed
|
First €20,000
|
Nil
|
Next €10,000
|
€1 per €1,000
|
Next €10,000
|
€2 per €1,000
|
Balance
|
€4 per €1,000
|
The formula for assessing means from capital for Disability Allowance is as follows:
Capital
|
Weekly means assessed
|
First €50,000
|
Nil
|
Next €10,000
|
€1 per €1,000
|
Next €10,000
|
€2 per €1,000
|
Balance (any capital over €70,000)
|
€4 per €1,000
|
The formula for assessing means from capital for Supplementary Welfare Allowance is as follows:
Capital
|
Weekly means assessed
|
First €5,000
|
Nil
|
Next €10,000
|
€1 per €1,000
|
Next €25,000
|
€2 per €1,000
|
Balance
|
€4 per €1,000
|