Disability Allowance and Potental Inheritance over €120,000

[lady17]

I am puting this question here on behalf of a friend of mine who I will call Paul.

Paul is getting disability allowance as he is on the austic spectrum but he is high functioning. He is planning to get some part time work soon.

His parents are still alive and he has siblings also. In time his parents house will be sold and Paul and 2 other siblings will each get a 1/3 of the value. At the moment I think this house would be worth €380,000. Paul would be entitled to apox €127,000

I have looked into what would happend if he was to get a large sum of money at a later date and he can have up to £70,000 in savings before his disability allowance is effected to much.

After £70,000 he will lose €4 per every €1,000 in savings so €127,000 -70,000= €57,000. €4x57=€228 per week which is over his full disabilty allowance.

With the disability allowance he also gets some additional benefits and the main one is free travel. Paul lives lives in rural area and uses the free travel a lot and does not want to lose this. Also he wants to have some of this inheritance in savings as he gets older. He has prsi stamps from employment and will have stamps to get a contributary pension at retirement age.

I know his family would have money. I think if they give him €3,000 a year it would be tax free. This €3,000 a year could be given each year over the next 10 years and be paid back when Paul gets his inheritance.

I know that people can put money into trusts but I think this would mean that his disability would be means tested and he run into the same problem as to much savings. I am just wondering if their are any other ways of Paul keeping his disability allowance after getting his inheritance.

 

[Marc]

We looked at this question for someone in a similar position.

We explored the possibility of making a very large contribution to a PRSA since these are excluded from many means tested benefits.

Tax relief is available against earned income indefinitely and the PRSA can be drawn down in stages to provide capital payments which can be safely consumed.


Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie

 

[Pinoy adventure]

Paul's parents could set up a special needs trust for him now and leave his share in trust for him which would not effect his disability allowance.

I'm not sure I'm allowed too post the name of the solicitor/group we used too set up our special needs trust but can pm you the details if that suits.

 

[fairy1]

If Paul has enough PRSI contributions he would be better applying for Invalidity Pension which is not means tested.

 

[kinnjohn]

If Paul has enough PRSI contributions he would be better applying for Invalidity Pension which is not means tested.

My understanding of invalidity pension is if you are working part-time which is the case with paul his invalidity pension can be reviewed at any time,

I am sure some poster more knowledgeable than me can better update this tread on the rules around working part-time and claiming invalidity pension,

 

[Marsupial]

I am puting this question here on behalf of a friend of mine who I will call Paul.

Paul is getting disability allowance as he is on the austic spectrum but he is high functioning. He is planning to get some part time work soon.

His parents are still alive and he has siblings.

I know his family would have money. I think if they give him €3,000 a year it would be tax free. This €3,000 a year could be given each year over the next 10 years and be paid back when Paul gets his inheritance.

He can get a €3,000 tax free GIFT from each parent annually (and also from each sibling should they wish to do so). However if it will be paid back when "Paul" gets his inheritance then it's not a gift!

 

[fairy1]

Paul

Partial Capacity Benefit​

would be entitled to apply for after been awarded Invalidity Pension , this can be allowed for 3 years and reassessed to see if he can continue. Depending on his medical condition it might suit . Hard to tell when medical condition is unknownl

 

[Steven Barrett]

We looked at this question for someone in a similar position.

We explored the possibility of making a very large contribution to a PRSA since these are excluded from many means tested benefits.

Tax relief is available against earned income indefinitely and the PRSA can be drawn down in stages to provide capital payments which can be safely consumed.


Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie

Wouldn't the income taken from the PRSA be taxed as income? And he wouldn't have access to the PRSA until he is 60. Surely a trust would be more beneficial in this instance?


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)

 

[homer911]

He can get a €3,000 tax free GIFT from each parent annually (and also from each sibling should they wish to do so). However if it will be paid back when "Paul" gets his inheritance then it's not a gift!

This would be a loan and as such subject to a notional interest calculation by the revenue which would become the gift, although never likely to exceed the 3000 per year. Its always worth availing of this threshold if the total likely inheritance will exceed CAT thresholds

 

[Smaug~~°w°~~]

The first 50K is not taken into account for the disability allowance means test. After 50K it's €1 per €1000 on the next 10K. Then €2 per €1000 on the next 10K - anything over 70K is €4 per €1000. Citizens information and social welfare have all the rules in full.

Is he renting or paying a mortgage etc., at the moment? The 77K over the savings limit would be very quickly eaten up by paying down all or part of a mortgage. If he's renting then buying a house/apartment would use up all or most the inheritance.

 

[Pinoy adventure]

The first 50K is not taken into account for the disability allowance means test. After 50K it's €1 per €1000 on the next 10K. Then €2 per €1000 on the next 10K - anything over 70K is €4 per €1000. Citizens information and social welfare have all the rules in full.

Is he renting or paying a mortgage etc., at the moment? The 77K over the savings limit would be very quickly eaten up by paying down all or part of a mortgage. If he's renting then buying a house/apartment would use up all or most the inheritance.

Paul would still need too notify the department of a change in circumstances so they would review his case once notified,otherwise he could run into problems