Entitlement to old age contributory pension is based upon a pensioner's means. The pension is payable at the maximum rate of €166 per week if the weekly means do not exceed €7.60. Where the weekly means exceed this amount but are equal to or less than €170.10, a reduced rate of pension is paid on a sliding scale.
In assessing the means, account is taken of any cash income the person may have, together with the value of capital and property, except the home. Capital includes savings, investments and cash-on-hand and is assessed by reference to a formula laid down in legislation. An initial amount of capital is disregarded before means are assessed. From June next, this disregard is being increased to €20,000 from approximately €12,700 or £10,000 which applied from October 2000. It should be noted that prior to that, the disregard was considerably lower, namely, £200 from 1979 to 1997 and £2,000 from 1997 to 2000.
The source of any capital held by a pensioner can and does vary. It can include savings from income while formerly working, savings derived from the sale of property or other assets, savings from occupational or social welfare pensions, gifts, inheritances, accumulated interest or dividends or a combination of these.
The rate of old age non-contributory pension payable in each case is set at a level that enables a pensioner to have an adequate standard of living. It would be expected that most pensioners would spend all or most of their pension each week in meeting their normal day-to-day living expenses. However, it is recognised that some pensioners may choose to save part of their non-contributory pension. Such savings are treated in the same manner as savings from any other source — for example, savings from an occupational pension — and the disregard comes into play. Any savings in excess of this limit are assessed in accordance with a special formula, details of which are set out in Appendix 1.
The new arrangements will mean that a single non-contributory old age pensioner, with no other means, can have capital of up to €28,000 and still qualify for a pension at the maximum rate. A single pensioner can have capital of up to €76,000 and still qualify for a minimum pension. These figures are doubled in the case of a pensioner couple.
There is an obligation on a person who applies for old age non-contributory pension to fully declare his or her means. When a person applies for an old age pension, he or she is visited by a social welfare inspector who investigates the applicant's means, including savings.
Once a pension is in payment, the pensioner is obliged by law to notify the Department of any change in means. Every pension book advises that the Department must be notified if the means or that of a qualified adult change. Means includes income from all types of employment, social security pensions from another country, occupational pensions, investment income, bank savings or income from any other source.
If the means are not fully disclosed, an overpayment of pension may arise. If, subsequent to the death of such a recipient, it comes to light that not all of the deceased's means were disclosed, social welfare legislation gives the Department the right to recover from the estate of the deceased any moneys overpaid. It should be noted that recovery of overpayments from estates does not imply that the deceased pensioner has engaged in fraudulent concealment of his or her means. We stress that point. Such recovery is based on new facts or evidence regarding the pensioner's actual means at given points in time.
The personal representative of a deceased non-contributory pensioner is obliged to provide the Minister for Social and Family Affairs with a copy of the deceased person's schedule of assets, together with three months' written notification of their intention to distribute the estate. The schedule is compared by the Department against the last means report provided by the Department's social welfare inspector in respect of the deceased pensioner. If there is no discrepancy between the means report and the schedule of assets, the personal representative is advised that it is in order to distribute the assets as there has been no overpayment of pension.
If, however, there is a discrepancy between the two, for example, the existence of a previously undisclosed bank account or a substantial increase in capital, then there is a possibility that a retrospective reduction or revocation of the pension is required. In any such case, the personal representative and his solicitor are advised by the Department that sufficient assets should be retained from the estate to repay any sum which may be due, until the question of any overpayment is finalised. Where it is ascertained that there is a possible overpayment, the file is forwarded to the social welfare inspector for investigation.
On receipt of the file, the social welfare inspector issues a letter to the personal representative requesting transcripts of bank statements and any other documentation or information that is necessary to establish whether an overpayment exists. By analysing the bank statements etc., the social welfare inspector calculates the revised means of the deceased pensioner retrospectively for the period during which the pension was paid. In addition, the social welfare inspector will often make an estimate of the amount of pension overpaid. When doing so, a flexible approach is adopted so as to take account of funeral and legal expenses for which the estate is liable. If the facts of the case are agreed, then the personal representative may propose a provisional settlement with the social welfare inspector in respect of the overpayment and hand over, or propose to, a cheque for this amount. The file is then referred to a deciding officer.
The following factors are taken into account by the deciding officer in considering the case: (1) whether the pensioner had means at claim stage which she or he failed to disclose and/or (2) whether she or he was subsequently reviewed and failed to disclose his or her full means; (3) whether the undisclosed capital was of a significant amount — more than £5,000 or €6,348.69; (4) whether the bank account was active, with the pensioner making transactions on a regular basis; (5) whether other undisclosed means, if any, was of a significant amount; (6) whether there is evidence that she or he was incapacitated or in poor mental health. In cases where a provisional settlement has been reached and the deciding officer considers that an adequate amount has been proposed in settlement of the overpayment, the deciding officer issues a formal written decision stating that the payment received is being accepted in full and final settlement to the debt.
Where a provisional settlement is not a factor, the deciding officer writes to the personal representative stating that based upon the evidence available, it would appear that an overpayment of pension has occurred, details of which are provided. The personal representative is afforded a period of 21 days in which to bring to the attention of the deciding officer any facts or evidence that he wishes the deciding officer to take into account before a formal decision is made. When the deciding officer makes a decision on the matter, this is notified in writing to the personal representative who has the right to seek a review of the decision. In any event, the personal representative also has the right of appeal against the deciding officer's decision to the Social Welfare Appeals Office. They are also advised of the method by which it is proposed to recover the overpayment, having regard to the Department's code of practice on the recovery of overpayments.