# Non-contributory state pension entitlement after large inheritance



## michaeltierney4 (17 Sep 2020)

Hi folks, I am wondering if anyone can help me with a state pension question. I currently receive a non-contributory state pension. My mother died and left me part of her estate which turned out be worth around €300k to me personally. I am 71, own my own house and am comfortable with my state pension and medical card. This now puts it all in jeopardy. I plan on leaving this money to my children in my will. So, what I want to know is...

If I divide this money and give it to my 4 children now (which leaves me with my previous €20k in savings), can I legally continue to collect my non contributory state pension and keep my medical card?

I have some medical issues and I use my card a lot. If I lost it, I dont have health insurance and given the nature of my health problems, I assume the premiums for it would be very high.


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## NoRegretsCoyote (17 Sep 2020)

michaeltierney4 said:


> My mother died and left me part of her estate which turned out be worth around €300k to me personally.



Is this in cash? Or full or part ownership of a property?


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## michaeltierney4 (17 Sep 2020)

NoRegretsCoyote said:


> Is this in cash? Or full or part ownership of a property?


It was some cash and a house. The house was sold and then all the of the proceeds were divided between her 3 children.


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## NoRegretsCoyote (17 Sep 2020)

michaeltierney4 said:


> It was some cash and a house. The house was sold and then all the of the proceeds were divided between her 3 children.



Thanks. If it was a house you could live in it and it wouldn't impact the means test.


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## Conan (17 Sep 2020)

If you are in receipt of a “means tested” benefit, then you are required to notify DEASP if your financial circumstances change, such as an inheritance. I suggest you consult with your local Citizens Information office and they can advise you on the likely impact of the inheritance on your Non Contributory Oension.


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## Protocol (18 Sep 2020)

michaeltierney4 said:


> I have some medical issues and I use my card a lot. If I lost it, I dont have health insurance and given the nature of my health problems, I assume the premiums for it would be very high.



Health ins premium are not like car ins - they are the same for everybody.

They are community-rated, not individually-rated.

What would happen is that pre-existing conditions would not be covered for a while = waiting period.


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## Protocol (18 Sep 2020)

The over 70s medical card means test is mainly based on income, not wealth.

Look it up.


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## AndroidMan (18 Sep 2020)

Protocol said:


> Look it up.



I think the reason the OP came to this fantastic site is to get jargon-free advice and opinions rather than trawling through pages of official websites that sometimes do not explain things in a language the average person can comprehend.
My parents are a similar age to the OP and come to me rather than looking it up.
I then either look it up or come to AAM.


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## michaeltierney4 (18 Sep 2020)

Protocol said:


> The over 70s medical card means test is mainly based on income, not wealth.
> 
> Look it up.


It looks like you cant have more than €36k judging by what I read here:

I posted the wrong link here earlier, the over 70s medical card means test is different...






						Medical card means test: aged over 70
					

How your income is assessed for the medical card income limits if you are over 70 years of age.




					www.citizensinformation.ie


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## fayf (18 Sep 2020)

Thats not correct, the first €36 k for a single person or the first €72 k fora couple is “disregarded”, they ad a notional weekly income amount, for amounts above those limits.

So, if one was single and had €100k in a bank account, 36k is disregarded, and a notional amount of weekly income is applied to the balance of €64k as per the figues here:






						Medical card means test: aged under 70
					

How your income is assessed for the medical card income limits if you are under 70 years of age.




					www.citizensinformation.ie
				




But i notice, you can also use interest certificates for the deposits, which may well be lower that the above method.

“You can request the actual rate of interest from savings and investments to be taken into account if you provide certificates of interest.“

I’d recommend contacting Citizens Advice for more details and guidance


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## michaeltierney4 (18 Sep 2020)

I called Citizens Advice and explained the situation. They said that the medical card for an over 70 should be fine. As long as your assets don't generate an income(or interest) of over roughly €500 per week, then you should be fine.

They also said that you cant deprive yourself of assets (give assets away) in order to qualify for a social welfare payment (non-contributory pension in my case). They pointed me to this:





						Operational Guidelines: Means Assessment
					






					www.gov.ie
				




So it would seem that, if I gave this money away now to my kids, I would still be assessed as if I didnt and would loose my pension. But I probably can keep my medical card.


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## michaeltierney4 (18 Sep 2020)

Just a note from earlier, the over 70s medical card means test is different to the under 70s mean test.






						Medical card means test: aged over 70
					

How your income is assessed for the medical card income limits if you are over 70 years of age.




					www.citizensinformation.ie
				








						Medical card means test: aged under 70
					

How your income is assessed for the medical card income limits if you are under 70 years of age.




					www.citizensinformation.ie


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## NoRegretsCoyote (18 Sep 2020)

It clearly says:



> Where it appears that a claimant has either directly or indirectly deprived himself/herself of any *income *or *property *in order to qualify for a payment, or to qualify for a payment at a higher rate, the income or the yearly value of the property must be assessed as means against the claimant.



This clearly says "income or property", and not cash, which is what you have.

My reading is that you can give your kids a gift of the cash without it impacting your pension. This will count against their lifetime inheritence tax threshold of €335k each but unless you have a very valuable house this won't matter once it's split four ways.

Another option is to buy a bigger house, or renovate your current house. You could also buy a new car to do you a decade or more. Neither your own house or a car counts as means.

You can also do some combination of the above.


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## Conan (18 Sep 2020)

If you read the Introduction to the “Operational Guidelines” (post 11 above) you will see that for a means tested Non Contributory State Pension, the Department attributes a “notional income” to any property (including Cash) that you acquire subsequent to getting the Non Contributory Pension (I don’t think NoRegretsCoyote is correct in the above post). Equally, giving away some of the Cash (or buying a top of the range Mercedes) does not change the fact that your financial situation changed as a result of the inheritance. 
Whilst the first €20,000 of any Cash is disregarded, any other Cash or  Assets are taken into account. As I suggested earlier, arrange an appointment with your Local Citizens Information office to get advice.


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## NoRegretsCoyote (18 Sep 2020)

Conan said:


> If you read the Introduction to the “Operational Guidelines” (post 11 above) you will see that for a means tested Non Contributory State Pension, the Department attributes a “notional income” to any property (including Cash) that you acquire subsequent to getting the Non Contributory Pension (I don’t think NoRegretsCoyote is correct in the above post).



Where does it say this? The term "notional income" does not appear in the operational guidelines.


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## Conan (18 Sep 2020)

NoRegretsCoyote said:


> Where does it say this? The term "notional income" does not appear in the operational guidelines.


See Sections 3 and 4


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## michaeltierney4 (18 Sep 2020)

Thank you for all of your help. As a note, the person I talked to on the phone understood the term "*property*" to mean any assets, cash, land etc. as opposed to just meaning property as in houses etc.


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## Conan (18 Sep 2020)

michaeltierney4 said:


> Thank you for all of your help. As a note, the person I talked to on the phone understood the term "*property*" to mean any assets, cash, land etc. as opposed to just meaning property as in houses etc.


Correct.


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## Allpartied (18 Sep 2020)

If you lose your medical card you would still be entitled to public healthcare.  The means testing for the GP card is quite generous ( only interest on your savings would be counted) and the charges for patients without a medical card, availing of public healthcare are still below the cost of private insurance. There is no exclusion based on pre-existing conditions.  Public healthcare is available to all EU citizens resident in Ireland.


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## Feemar5 (18 Sep 2020)

I would advise you to advise the Department as soon as possible because when you pass on any overpayment you have received has to be repaid to the department.    It would be better to be upfront with them rather than having your family pay back.


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## NoRegretsCoyote (18 Sep 2020)

Conan said:


> See Sections 3 and 4



I don't see support for your claims in these sections.

The part on wilful deprivation talks about *property* and *income*, but not very clearly does not use the term *capital* which has a different definition set out above, namely consisting of "savings and investments".

The omission of the term *capital* from this section is hardly accidental.

All I am doing is a close reading of the text. I can't see any support for a claim that gifting cash savings to your kids would interfere with your means-tested entitlements.

I am happy to be corrected by someone with direct knowledge of the process or by reference to other guidelines or legislation,  but I just don't see it on paper.


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## Conan (18 Sep 2020)

NoRegretsCoyote said:


> I don't see support for your claims in these sections.
> 
> The part on wilful deprivation talks about *property* and *income*, but not very clearly does not use the term *capital* which has a different definition set out above, namely consisting of "savings and investments".
> 
> ...


See section "Capital and Property not personally used...". It outlines how they value capital (incl Cash) in income terms.


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## NoRegretsCoyote (18 Sep 2020)

Conan said:


> See section "Capital and Property not personally used...". It outlines how they value capital (incl Cash) in income terms.



Yes that's clear.

But OP is talking about a scenario where he gives his cash away and he goes back to having €20k which is exempt.

Where does it say you will be penalised for giving away your savings?


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## Conan (18 Sep 2020)

Giving the money away, losing it by betting on the favourite in Leopardstown or buying a Mercedes does not change the fact that he inherited the funds. Having inherited the funds he is obliged to inform Social Protection.


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## Pmc365 (19 Sep 2020)

If the recipient of the non-contributary pension invested the money in his principal private residence for argument sake a large extension costing €300k thus increasing its value but keeping €20k in savings would this permit him to retain his pension?


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## NoRegretsCoyote (19 Sep 2020)

Conan said:


> Giving the money away, losing it by betting on the favourite in Leopardstown or buying a Mercedes does not change the fact that he inherited the funds. Having inherited the funds he is obliged to inform Social Protection.



Indeed.

But you've claimed that these actions will reduce his means tested pension but you can't point to where it says this in the guidelines.


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## Conan (19 Sep 2020)

NoRegretsCoyote said:


> Indeed.
> 
> But you've claimed that these actions will reduce his means tested pension but you can't point to where it says this in the guidelines.


I never suggested it would reduce the OP's pension. What I said was that if you are in receipt of a "means tested" benefit and your financial circumstances change, that you are obliged to advise the Dept. That's why I suggested he contact his local Citizens Information office to determine whether the amount of his inheritance might impact his Non Contributory Pension.


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## Monbretia (19 Sep 2020)

I haven't read through recent links posted but definitely willfully depriving yourself of funds, especially just hard cash will definitely affect a means tested payment.  I dealt with something similar where lady had sold her house and moved to one recently left to her by a sister, she gave away to her children all the funds from the sale, she lost her payment and spent months appealing it however she did get it back eventually on appeal.   I can't remember though the basis of what reason she was using for appealing!


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## Protocol (20 Sep 2020)

AndroidMan said:


> I think the reason the OP came to this fantastic site is to get jargon-free advice and opinions rather than trawling through pages of official websites that sometimes do not explain things in a language the average person can comprehend.
> My parents are a similar age to the OP and come to me rather than looking it up.
> I then either look it up or come to AAM.



It was 1am, and I was trying to get to bed, I suppose. Sorry.


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## Saavy99 (21 Sep 2020)

The OP is 70, he should also note that should he need to avail.of Fairdeal scheme in next five years, the €300,000 will also be taken into account whether he gives it away or not.


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## sharkattack (21 Sep 2020)

If the OP does is not entitled (I don't know if they are not) to keep claim pension this would have serious implications if the OP were to die (god forbid).  When the  OP estate goes to probate the revenue commissioners will see that he has been claiming a pension when not entitled to since inheritance.   In this instance revenue will clay back every cent that was paid to the OP via pension since they got inheritance and take it from the Will of the OP.  There is an old saying in the Revenue office - "If we don't get you when your alive - we'll get you when you are dead", which could well be the case in this instance.


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## michaeltierney4 (21 Sep 2020)

sharkattack said:


> if the OP were to die (god forbid)


Pretty sure I am going to die!


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## NoRegretsCoyote (21 Sep 2020)

My advice would be to write to DEASP outlining your plans and asking what the impact on your state pension would be. If you don't get the answer you want, appeal it. 

If after appeal it is clear that giving your money away would see a loss of pension then don't do it. If you can live on 13k a year then you will be a long time burning through €300k, and whatever is left will go to your kids as planned.


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## michaeltierney4 (21 Sep 2020)

NoRegretsCoyote said:


> If you don't get the answer you want, appeal it.


Just on this note, what exactly would be grounds for appeal?


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## Saavy99 (21 Sep 2020)

€300,000 is huge sum in cash, few pensioners would have such an amount. Why should tax payers continue to  pay a state pension to a person of such means especially when they never contributed to the prsi fund?


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## michaeltierney4 (21 Sep 2020)

Saavy99 said:


> €300,000 is huge sum in cash, few pensioners would have such an amount. Why should tax payers continue to  pay a state pension to a person of such means especially when they never contributed to the prsi fund?


I don't disagree with anything you have said. I am just trying to navigate the situation I have found myself in as best I can. I dont have a history of having a lot of money so I have a lot of learning to do.


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## michaeltierney4 (22 Sep 2020)

Saavy99 said:


> when they never contributed to the prsi fund


This is not true, I just don't have enough stamps for a contributory pension.


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## NoRegretsCoyote (22 Sep 2020)

michaeltierney4 said:


> Just on this note, what exactly would be grounds for appeal?



It depends on what the grounds for rejection are.


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