Notional interest rate applied to investments for over 70s medical card?

elliej69

Warning (long post)

Hi All, I’d be very grateful for any help you could give me. Am completing a medical card application for my over 70s parents and am bamboozled.

They have some long term investments - where no income has been paid as yet; rolled up and to be paid on maturity - which are set to mature starting next year. As to the income which is deemed to apply to such investments for med card purposes, the HSE website says as follows:

“How are savings and similar investments treated under the new scheme?

Savings or similar investments of €36,000 for a single person and €72,000 for a couple are disregarded. The remainder of savings and similar investments will be assessed on the income calculated at a notional interest rate based on the prevailing interest rates at the time of application. The Central Application Unit will review the notional rate on a quarterly basis.

Alternatively where an applicant wishes to have the actual interest from savings / investments applied, and provides a certificate of interest paid on his/her savings in the last full calendar year, the HSE will apply this approach and use the most beneficial option in favour of the applicant (subject to submission of the appropriate certificates from the relevant institutions).

In this context it should be noted that in the case of some “longer term” investment accounts, where the interest is only applied at the end of a fixed period, if the client so wishes the HSE will only take account of the interest earned on the date the investment matures. The alternative is as above. i.e. an annual notional rate will be applied

In essence, only the interest or income earned on savings and similar investments will be counted as income, not the total values of the savings or investments themselves.”

At this stage my preference would be for the parents to take the notional interest approach on an annual basis as actually applying the interest on maturity of a particular investment may take them out of the med card limits for that year. All very well, but what’s the notional rate? The HSE today said it’s 3%; the Irish Times said 5% (may have been at the time the article was published in March) and a very scary part of the Citizen’s information Bureau website says as follows:

"Capital; savings, investments and property

Notional assessment of interest
Capital Weekly means assessed
First €36,000 (single), €72,000 (couple) Nil
Next €10,000 €1 per €1,000
Next €10,000 €2 per €1,000
Balance €4 per €1,000"

€4 per €1,000 per week - that’s €208 per €1k annually!!!! The HSE say that that’s relevant to under 70s only, although TBH it’s not clear from the website.

So I’d be very grateful if anyone knows the current notional rate. Otherwise I’ll ask Age Action who I hope will know.

Many thanks in advance