Social Welfare Means Testing in Ireland

For some social welfare payment schemes, you must pass a means test. But what exactly is it and how does means testing in Ireland work?

Some types of social welfare payments require you to satisfy a means test as well as a habitual residence test. The means test is a way of checking if you have enough financial resources to support yourself. It also checks what amount of payment you may qualify for. This means test is carried out by the Department of Employment Affairs and Social Protection (DEASP).The habitual residence test, on the other hand, checks if you are habitually resident in Ireland.

Where to apply for means testing in Ireland?

When you apply for a means-tested social welfare payment, also called social assistance payment, you first need to fill out an application form. You must give details of all your sources of income as well as all your means in it. The DEASP is allowed to ask you for details of the bank accounts you hold. They will not access it unless given permission. If you apply for means-tested payment and you are married, in a civil partnership or cohabitating, the means of your significant other are also taken into account.

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How does means testing work?

All your sources of income are taken into account when deciding whether you qualify for a means-tested payment. It is a complex calculation and the amount necessary can differ from payment to payment. You will be informed on how your means were assessed. If you are dissatisfied with their methods, you can appeal to the Social Welfare Appeals Office. Once you are awarded a social welfare payment, you are responsible for informing the DEASP about any changes in your circumstances. You may be liable for fines if you do not do so.

Assessing Cash income

The means test assesses all cash income that you expect to get during the year. Usually this is assessed by calculating the income you received in the previous year. This cash income includes any income from employment or self-employment including farm income, income from social security pension from another country and maintenance payments. There is some cash income that is not included in the means test. For further information, ask the DEASP.

Income from employment

It depends on the payment you are applying for how your income from (self-)employment is assessed. Some things are always deducted from your gross earnings, like your PRSI or your Union dues. Income tax or the Universal Social Charge is not usually deducted from your income, with some exceptions.

Cash income not taken into account

The following cash income is not taken into account. This applies for all schemes except Working Family Payment, Supplementary Welfare Allowance and Rent allowance which have their own rules for cash income:

• Any payment by the DEASP (except for Jobseeker’s Allowance)
• Domiciliary Care Allowance
• Income from property already assessed on its capital income
• Any payment corresponding to Child Benefit from another EU member state
• Income from recognised non-profit charitable organisations
• Mobility Allowance from the Health Service Executive (HSE)
• Foster Care Allowance from the HSE
• Consumer Directed Home Support (CDHS) from the HSE
• Allowances under the Home Tuition Scheme from the Department of Education and Skills
• Payments under the Department of Education and Skills’ school transport scheme for children with special educational needs
• University payments made under the Higher Education Scholarships for Adult Learners of up to €7000 per year
• Any amount received as a training allowance while undergoing a course of rehabilitation training by an organisation approved by the Minister for Health
• Compensation awards together with income from the investment of that money
• €104 per year from certain Army pensions (including a British War Pension)
• Personal Retirement Savings Account contributions
• some specific payments to your spouse, civil partner or cohabitant

How property personally used is assessed

The house you live in is not included in the assessment of your means unless you are getting an income from it. For example, if you have rented a room in the house, that income is assessed. You can deduct five% of the gross rent for wear and tear and 15% can be allowed for vacant periods between lettings. If you sell your home, the proceeds of it are taken into account. However, if you are getting certain payments and sell your house in order to acquire more suitable accommodation, the first €190,500 of the proceeds is not taken into account. This exemption only applies if you are getting one of the following payments:

• State Pension
• Widow’s, Widower’s or Surviving Civil Partner’s Pension (if you are 66 years of age or over)
• One-Parent Family Payment (if you are 66 years of age or over)
• Disability Allowance
• Blind Pension

How capital and property not personally used is assessed

Capital includes property (not used by you), savings and investments. If you own a property or any form of capital, the value is assessed using a standard formula. The property and investments that may be assessed under this heading include:

• savings in a bank account (or anywhere else)
• a house you have let
• stocks and shares

Your capital is not assessed in the means test for Working Family Payment. The standard formula for assessing the value of capital for most social welfare payments except Disability Allowance and Supplementary Welfare Allowance is:

For Disability Allowance the first €50,000 is not taken into account, for Supplementary Welfare Allowance only the first €5,000.

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Total means

Your means are added together to find your total means. For most means-tested payments, the rate of social welfare payment is reduced according to your means. In some cases, your age can also determine the maximum payment for your situation as is the case for Jobseeker’s Allowance or Supplementary Welfare Allowance.