# Non-contributory state pension - lump sums



## Getrag (19 Apr 2019)

Hi, apologies if this is on the wrong forum.

My mother is 75 and in receipt of the non contributory state pension.  She was involved in an accident and is about to receive €52,000 in compensation.

I’m concerned that it will affect her pension if she is means tested as she will be holding a cash sum in excess of the permitted €20k.

Is there any way of avoiding this?

It seems a bit unfair to reduce her pension due to the circumstances and her dependence on the lump sum for future care.


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## Feemar5 (19 Apr 2019)

She will need to notify Social Protection and she can try fighting her case but as she is above the permitted savings I doubt if she will suceed - try anyway.     It is very important that they are notified as when the time comes for her estate to be sorted out they will definitely look for a refund of any overpayment.   I know several families who had to repay Social Protection big amounts of money where whoever was claiming the non contributory pension did not declare everything.


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## Jim2007 (19 Apr 2019)

Getrag said:


> It seems a bit unfair to reduce her pension due to the circumstances and her dependence on the lump sum for future care.



She has contributed nothing towards this pension... and you think it fair that the taxpayer should continue to sub her when she clearly has over twice the allowed savings.... put your sense of entitlement in check for a change.


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## Getrag (19 Apr 2019)

Points taken but rather than debate the equity of it, can I ask what she can do to bring her under the €20k threshold.  

Can she spend it or give gifts to her children or husband or does she fail the means test as soon as she receives the sum?


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## Getrag (19 Apr 2019)

Out of interest, how would this be picked up on when the estate is being sorted?


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## Nellie123 (19 Apr 2019)

Are any upgrades required to make her house more comfortable, better quality heating, kitchen, bathroom etc.


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## Marsha25 (19 Apr 2019)

Getrag said:


> Out of interest, how would this be picked up on when the estate is being sorted?



It will be picked up as Intreo will seek a schedule of your mother's assets when she dies. They can investigate her entitlement to the pension and seek bank statements going back as far as bank has them.  Going through the tedious process now.


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## Getrag (20 Apr 2019)

Nellie123 said:


> Are any upgrades required to make her house more comfortable, better quality heating, kitchen, bathroom etc.



Yes, the house needs work including the driveway to be surfaced to make access easier for her


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## NewEdition (21 Apr 2019)

Is it really the case that a state pension is affected if they have over 20k in savings?
That is not a lot of money at all. What is the justification for this?



Jim2007 said:


> She has contributed nothing towards this pension... and you think it fair that the taxpayer should continue to sub her


I dont think that is true.. dont all tax / PRSI payers contribute to this pot during their working life? And its therefore their entitlement.


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## Protocol (21 Apr 2019)

Only the non- con State Pension is means-tested.


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## NoRegretsCoyote (22 Apr 2019)

It is best to put it into something that will improve her quality of life and take her under the €20k - namely home improvements.

What I've never figured out is how long you can be over the €20k for without DEASP having a problem.

Say there was six weeks between the cash payment and whatever you spent it on. Would you be expected to declare whatever period you were over the limit? Or is there some kind of grace period?


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## Getrag (23 Apr 2019)

It says you must notify them of a material change in financial means within 2 or 3 months (I forget which) but I’m not sure if that gets you around the issue, even if you’ve spent enough to bring it under €20k...

How much can you gift your spouse before it has gift tax implications?


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## allencat3 (26 Apr 2019)

My husband (77) and myself (66) are severely disabled since birth. Both of us underwent special education and my husband had to persevere remaining employed for 50+years without any educational qualifications. Due to my hardworking parents, despite raising a large family, ensured I obtained a Leaving Cert despite my disability in 1971. Social worker had to persuade an American company located in Ireland to give me a chance, and duly I worked gainfully. My husband applied for a mortgage but was turned downdue to his disability.Somehow thanks to my regular savings with a building society, I got a mortgage to purchase a house. During house-hunting, one estate agent refused to sell us a house, and my husband’s sister, working fora major newspaper, threatened to expose the estate agent on grounds of discimination.
   We kept up mortgage repayments faithfully despite paying interest rates of 16percent during the 1980s - no luxuriesof foreign holidays etc.  We have been taxpayers and paid PRSI contributions all our working lives.  Need I go on?


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## Kimmagegirl (26 Apr 2019)

allencat3 said:


> Need I go on?



Please do, because I am not sure what the point of your post is all about?

Why would your husband be turned down for a loan due to his disability?  Why would an estate agent refuse to sell you a house?  Why did you have no foreign holidays? Why did your husband continue to work for 50 years?

What has this post got to do with the original poster's question?


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## Getrag (1 May 2019)

Getting back to the topic, I think I have this figured out hopefully - gifts between spouses are exempt from gift tax so she can transfer enough to my Dad to bring her under the €20k threshold.  Dad has a contributory pension so the threshold won’t affect him.


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## Steven Barrett (1 May 2019)

Getrag said:


> Getting back to the topic, I think I have this figured out hopefully - gifts between spouses are exempt from gift tax so she can transfer enough to my Dad to bring her under the €20k threshold.  Dad has a contributory pension so the threshold won’t affect him.




Which is a massive loophole in the system that has not been closed and should be. Loads of "housewives" of wealthy men who raised the children. He has all the assets in his name so the wife can apply and get a non contributory pension. Which completely defeats the purpose of the non contributory pension which is to help people who have nothing.


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## Bronte (1 May 2019)

I don't understand how the mother has a pension on her own. I thought she would be treated as the husband’s dependant. And he’d get extra for her.


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## Bronte (1 May 2019)

Well done Allencat on both your and your husbands achievements. Nice to see older people contributing to this website.


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## RedOnion (1 May 2019)

Bronte said:


> I don't understand how the mother has a pension on her own. I thought she would be treated as the husband’s dependant. And he’d get extra for her.


Non contributory is slightly higher than dependent pension, for those who pass the means test.


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## Bronte (1 May 2019)

RedOnion said:


> Non contributory is slightly higher than dependent pension, for those who pass the means test.


I still didn’t not get it, I thought as a spouse you would not be able to get the non contributory where your spouse had the contributory. That’s what my grandparents had. And I believe it’s what my brother in law and his wife has.


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## RedOnion (1 May 2019)

Bronte,
I believe you've a choice, but I've very limited knowledge, and welcome correction. The means test for dependant are less strict, so beneficial where there is other income or joint assets. And it might depend greatly on the relative ages of the couple.
Take OPs case. If mother was older, she'd have qualified for non contributory before spouse had contributory and dependant adult.
If she was younger, spouse would have got dependant adult increase before she was eligible for non-contributory.


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## Bronte (1 May 2019)

Would she get the non contributory if her husband was working. Surely not.


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