Dáil Éireann Debate, Wednesday - 3 March 2021
532. Deputy Neale Richmond asked the Minister for Social Protection if she has considered ensuring that inheritances that do not qualify for inheritance tax do not affect a non-contributory pension; and if she will make a statement on the matter. [11105/21]
View answerSocial welfare legislation provides that all income and capital belonging to an applicant (and his or her spouse/partner, where applicable) is assessable for means testing purposes for social assistance schemes, such as the State Pension Non-Contributory (SPNC). This includes property (other than the family home) or capital including sums which have been inherited.
Under the means testing rules applying to the SPNC, the first €20,000 of capital is fully disregarded; the next €10,000 is assessed at €1 per thousand, the next €10,000 is assessed at €2 per thousand, with the remainder assessed at €4 per thousand. The SPNC means test also disregards the first €30 of weekly means from any source. This means that a recipient of the SPNC with no other means can inherit up to €40,000 (which would result in a weekly means assessment from capital of €30) and still qualify for the maximum weekly rate of payment.
I understand that a person may inherit up to €335,000 tax free, depending on how they were related to the deceased. Disregarding a potentially large amount of capital such as this, based solely on the fact that it has been inherited, would run contrary to the general aim of the means test, which is to ensure that persons with reasonable amounts of income or capital are in a position to use it to support themselves without having to rely solely on a means-tested welfare payment.
I trust this clarifies the position for the Deputy.
