Question about the Assessment of an Inheritance for a Beneficiary in Receipt of a Means-Tested Social Assistance Payment

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According to the Citizens Information website, if a person is in receipt of a means-tested social assistance payment (such as the non-contributory state pension), the house in which they live is not included in the assessment of their means, and “if [they] sell [their] house in order to buy or rent more suitable alternative accommodation . . . the first €190,500 of the sale proceeds is not taken into account.” (Askaboutmoney will not allow me to include the link.)

But suppose a testator was to bequeath money to a person without a home of their own who is on means-tested social assistance to enable that person to purchase a home. Could the testator direct in their will that the bequest be held in escrow by a solicitor for the beneficiary pending the beneficiary’s purchase of a home, and thereby shelter the bequest from being assessed as capital and thus decreasing the beneficiary’s weekly social assistance entitlement in the interim before they were able to purchase a home?

I phoned Citizens Information to ask the above question, but I was unable to get a clear answer. Any insight would be greatly appreciated.
 
Even if it is not shielded, you could try to time the sale and purchase so that they are pretty close.

In the scheme of a house purchase losing two months of a non-contributory state pension payment is not really material.
 
Investor said:
Any insight would be greatly appreciated.
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Dominic Coyle answered a related question in the Times recently, looks like there is also inheritance tax to consider.

‘’What I can assure you is that with assets of €300,000, she would not qualify for a weekly means-tested non-contributory pension payment. This is the case whether she owns the house or sells it and has the proceeds in her bank.
And the onus is on her to approach the Department of Social Protection to tell them she is no longer eligible for the pension.
There is one way out of this. If she lives in the property as her home – given she has no other property – it would not be tested for means. That would preserve the weekly pension but still leaves you with the nightmare of finding the means to pay the €88,000+ inheritance tax bill.’’

https://www.irishtimes.com/business...roperty-could-cost-you-your-pension-1.4506311
 
In the OPs case however,my reading would be: if the property was sold and the net proceeds used to buy a PPR, the SW benefit would not be lost.

Reading the OP again - is it cash or property being inherited?
 
I had forgotten that DSP put their operational manual for the assessment of means online.

It is clear that property owned but not occupied is treated the same as savings:

Capital (savings and investments) and the value of property owned but not personally used or enjoyed are assessed as means.
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It later says:
Where a Will has been proved or is in the process of being proven, it should be established whether the estate is to be administered in accordance with the terms of the Will or on the basis of the legal right of the person involved. The means should be assessed accordingly.
Where a Will has not been proved, the claimant's means should be assessed in accordance with the terms of the Will.
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To me it looks like (effectively immediately) the house would become means for the purpose of a means assessment. The location of the funds from the sale wouldn't appear to be material.


Another issue is that any residual from the sale becomes assessed as means too. You might inherit a house worth €500k and the rules encourage you to buy a house worth €500k even if you don't need one.

Assuming you have no other property, one way round this might be to move into the house that is bequeathed for a period. It then becomes your own home, and any sale proceeds of your own home up to €190,500 are excluded from a means test. So you'd sell for €500k, buy another house for €310k, and the balance of €190k doesn't reduce any means-tested payment.
 
Thirsty said:
In the OPs case however,my reading would be: if the property was sold and the net proceeds used to buy a PPR, the SW benefit would not be lost.

Reading the OP again - is it cash or property being inherited?
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It’s cash, but as NoRegretsCoyote pointed out, in the worst case scenario, the beneficiary would only lose their pension entitlement temporarily until they used it to buy a home. (There wouldn't be capital acquisitions tax, since the bequest would be under the relevant threshold.)
 
NoRegretsCoyote said:
I had forgotten that DSP put their operational manual for the assessment of means online.

It is clear that property owned but not occupied is treated the same as savings:



It later says:


To me it looks like (effectively immediately) the house would become means for the purpose of a means assessment. The location of the funds from the sale wouldn't appear to be material.


Another issue is that any residual from the sale becomes assessed as means too. You might inherit a house worth €500k and the rules encourage you to buy a house worth €500k even if you don't need one.

Assuming you have no other property, one way round this might be to move into the house that is bequeathed for a period. It then becomes your own home, and any sale proceeds of your own home up to €190,500 are excluded from a means test. So you'd sell for €500k, buy another house for €310k, and the balance of €190k doesn't reduce any means-tested payment.
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Thanks, NoRegretsCoyote. That's all very helpful.
 
Simplest thing is to buy a house pronto.

Rather than lose the payment & then have to go through the painful process of re-applying; my approach would be to buy a home with the cash asap.

You can offer to repay the x no of months SW payment after the home is purchased; if there is a significant delay.

In my experience SW are not in the business of making life harder for an already vulnerable person.
 
The Department of Social Protection’s Operational Guidelines on Assessment of Means in Testacy Cases strike me as strange, if my understanding of the passage that NoRegretsCoyote quoted is correct:

“Where a Will has been proved or is in the process of being proven, it should be established whether the estate is to be administered in accordance with the terms of the Will or on the basis of the legal right of the person involved. The means should be assessed accordingly.”

Perhaps I am misreading the passage, but it appears that any capital bequeathed to a person on a means-tested payment is assessed as belonging to that person as soon as the executor applies for a grant of probate—"where a will . . . is in the process of being proven.” (I scanned the online guidelines for further clarification unsuccessfully.) Given that probate in Ireland can take over a year, how is a legatee on a means-tested payment who has no other income supposed to survive while waiting for the probate office to issue the grant, if they become ineligible for the payment they were previously in receipt of, but have not yet received the bequest?
 
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