Invalidity pension and property inheritance

chefacasa

Hello

I am in receipt of Invalidity Pension.
I will eventually inherit a property from my elderly parents.

Can you please tell me what will happen regarding the property and my pension when I do inherit?

The value of the property will be about €175,000 and I would like to rent it out for additional income. I do not want to sell it because I have a toddler and want it to go to her ultimately.

How much will my pension be affected?
Is this possible, or how is this possible?

Thanks

2ndcoming

You would more than likely be exempt from inheritance tax so where it would affect you would be on income tax. Your pension wouldn't be affected at all.

You would have to register for self-assessment and declare your rental income each year.

It would probably go something like:

Rent €1000pm = €12000
Less expenses €1500
Assessable rent €10500
plus
Invalid pension €10000

Taxable income €20500
Due @ 20% €4100
Less tax credits €3300

Tax Payable €800

USC income €10500

USC Payable €220

PRSI income €10500

PRSI payable €315

Giving you a total bill of about €1300 at the end of each year.

All this assuming you have no other income.

chefacasa

Thank you very much for your detailed and very fast reply

iseeblue

I just came upon this and it seems that I actually WILL lose my pension.

I hope I'm not interpreting it correctly?

https://www.irishtimes.com/business/personal-finance/will-inheritance-affect-disability-allowance-payment-1.3110945

2ndcoming wrote: »

You would more than likely be exempt from inheritance tax so where it would affect you would be on income tax. Your pension wouldn't be affected at all.

You would have to register for self-assessment and declare your rental income each year.

It would probably go something like:

Rent €1000pm = €12000
Less expenses €1500
Assessable rent €10500
plus
Invalid pension €10000

Taxable income €20500
Due @ 20% €4100
Less tax credits €3300

Tax Payable €800

USC income €10500

USC Payable €220

PRSI income €10500

PRSI payable €315

Giving you a total bill of about €1300 at the end of each year.

All this assuming you have no other income.

tanit

iseeblue wrote: »

I just came upon this and it seems that I actually WILL lose my pension.

I hope I'm not interpreting it correctly?

https://www.irishtimes.com/business/personal-finance/will-inheritance-affect-disability-allowance-payment-1.3110945

Disability allowance is means tested which means that any money you earn will affect the payments you receive. As far as I know Invalidity pension and Illness Benefit are not means tested and will not be affected by any other earnings you have: they are dependant on the contributions you have paid, medical assessments, etc.

You need to check what kind of payment you are getting exactly to know whether you will be affected by getting rental income. You may want to speak with someone in Welfare and check your situation.

Do you have two accounts?
It all depends on what you are receiving.

Squatter

tanit wrote: »

As far as I know Invalidity Pension and Illness Benefit are not means tested and will not be affected by any other earnings you have: they are dependant on the contributions you have paid, medical assessments, etc.

Correct.

Both of these payments are based on PRSI contributions so are payable to anyone who is eligible, irrespective of other means. They are however taxable.

DA, on the other hand, being an "allowance" rather than a "benefit" is means tested.