Annuity vs ARF debate.....what's a Fair Deal?!

Obviously, annuities and ARFs have their pros and cons. How big a factor is the Fair Deal scheme in this decision? At a general level, does it favour the annuity or ARF route or is it too nuanced?

Fair deal is means tested. ARF comes under the cash asset part of the means test. Cash Assets are deemed to include

• savings and deposits including those with banks, credit unions or post offices
• stocks, shares, bonds and securities
• approved retirement funds (value of fund at date of application)
• money loaned by you to another person
• cash assets transferred to another person

An annuity I would expect would be covered under the income part of the means test

• earnings
• pensions - this includes state pensions, private pensions and pensions from abroad
• social welfare benefits and allowances
• rental income from properties which are not your main home
• income from holding an office or directorship
• income from fees, commissions, dividends or interest
• income you gave away in the 5 years before your application

It's all going to depend on the overall income and assets of the applicant

Thanks thedaddyman,

Great answer. Two additional questions.

1. If someone is married, they would need to pay the HSE 3.75% of the ARF each year?
2. For simplicity, if a person has no other cash assets, they would have to raise this 3.75% by taking sufficient assets from the ARF so that the after tax proceeds of any such withdrawal would be sufficient to cover the 3.75%?