Dáil Éireann Debate, Tuesday - 26 September 2023
369. Deputy Richard Bruton asked the Minister for Social Protection whether it is possible to set up a trust for a person with a severe disability, without undermining their eligibility for disability allowance, which normally assesses a nominal weekly means to all capital exceeding €50,000. [41173/23]
View answerDisability allowance (DA) is a means-tested payment for people with a specified disability who are aged 16 or over and under the age of 66. The applicant must be suffering from an injury, disease, congenital deformity or physical or mental illness or defect which has lasted for one year or is expected to last for one year and, as a result of which, they are substantially restricted in undertaking work which would otherwise be suitable having regard to the person’s age, experience and qualifications. The person must also satisfy a means test and be habitually resident in the State.
If capital held by the person concerned is lodged into their own bank account, the money is assessed in accordance with the means guidelines and the person may receive a reduced rate of DA.
Where money is lodged into a Trust Fund, the nature of the Trust Fund will determine how the capital is dealt with when carrying out an assessment of the means of the person concerned for the purposes of DA.
Where a Trust Fund is owned by the person concerned, then money held in the fund is regarded as property owned and is therefore assessed as capital and the standard capital means test applies. However, periodic payments of lumps sums out of the fund to the person concerned are not assessable as means.
In the case of a Life Interest Trust Fund, income from the fund is assessed as means. Periodic payments or cash income that the person concerned may reasonably expect to receive from the fund during a particular year is assessable as means. The terms of the Trust and the manner in which it is administered will determine what income the person concerned may reasonably expect to receive.
Where the person concerned receives compensation and this is lodged to a Discretionary Trust, the manner of the administration of the Trust Fund will determine how the capital is assessed in any means assessment. Discretionary Trust Funds are administered by the trustee(s) who is given the authority to apply the income from the capital for the benefit of the person concerned as they see fit. The person concerned does not own the capital or have a life interest in it. The effect on the means of the person concerned for DA purposes depends on how the trust is administered.
I trust this clarifies the matter for the Deputy.
