Non contributory pension if have assets

jackboy

If someone has an unrented second house and an idle unused small farm, is that likely to have a significant impact on non contributory pension entitlements?

gipi

Both assets will be assessed based on their capital value (not the income they are or might bring in)

More info here

https://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_non_contributory.html

jackboy

https://www.boards.ie/discussion/comment/120226066#Comment_120226066

It seems a little confusing. If assets are of a certain value does that mean that no state pension will be paid? or is there a minimum everyone is entitled to?

Jim_Hodge

https://www.boards.ie/discussion/comment/120226382#Comment_120226382

See here

gov.ie - Operational Guidelines: State Pension Non-contributory (www.gov.ie)

jackboy

https://www.boards.ie/discussion/comment/120226423#Comment_120226423

There is a lot in that. I suppose my basic question is, is someone with significant assets not entitled to a non contributory pension?

Jim_Hodge

https://www.boards.ie/discussion/comment/120226604#Comment_120226604

No, look in the section on how capital is assessed. There is a reduction per week based on the value. It's one small section with a link in the contents

TooTired123

https://www.boards.ie/discussion/comment/120226382#Comment_120226382

The capital value of the assets is assessed.

There is a disregard of €20000 and then the next €10000 is assessed as +€10, the next €10000 is +€20 and every +€1000 after that is assessed as +€4.

So if your property is worth say, €275000 ( a house and a farm ) then the value per week as far a SW are concerned is €970 per week.

That €970 is deducted € for € from the non con state pension current maximum payment (€254) leaving you with no state pension.

So, no, there isn’t a minimum amount of pension or any allowance that someone is entitled to.

jackboy

https://www.boards.ie/discussion/comment/120227602#Comment_120227602

Perfect, that’s what I thought. So, that means farmers are not allowed state pension.

TooTired123

https://www.boards.ie/discussion/comment/120227689#Comment_120227689

Farmers were instructed to start paying PRSI in 1987. Any farmer who started paying it then who is retiring now would be entitled to a con state pension like every other PRSI contributor.

So, yes, farmers are entitled to a state pension.

scuba8

No. Farmers can get a contributory old age pension like most people.

Jim_Hodge

https://www.boards.ie/discussion/comment/120227689#Comment_120227689

I thought it was an idle unused farm. Farmers could have paid PRSI for a contributory pension.

jackboy

https://www.boards.ie/discussion/comment/120227749#Comment_120227749

Yes, I was talking about an unused farm. There are a lot of people who gave up farming decades ago but still have the land, so no PRSI paid.

https://www.boards.ie/discussion/comment/120227898#Comment_120227898

They've hardly been living on air since?

HerrKuehn

https://www.boards.ie/discussion/comment/120227898#Comment_120227898

If they gave up farming decades ago then they aren't farmers. They are just people who have significant assets who are looking for a non contributory pension. Surely they can be expected to dispose of the assets to pay for their living costs instead of expecting everyone else to pay so they can hold onto them.

jackboy

https://www.boards.ie/discussion/comment/120227980#Comment_120227980

Yes, I agree. I think I get the rules now.

TooTired123

https://www.boards.ie/discussion/comment/120228064#Comment_120228064

It’s very interesting and simple actually, the reality of applying to the state for a pension. You are saying at nearly 66. “ I think I need to retire now. Due to my age I can’t financially support myself (and possibly my spouse and maybe even children) any more. Can I have a pension please?”.

So the first thing the state does is look at your state insurance contribution history ever since you first started working.

Some people have made nearly 50 years of almost continuous weekly contributions. Before 1979 these contributions were known as “stamps”, a deduction from your earned wages every week that went into a pot of money which the state uses to pay people all kinds of SW benefits and allowances.

The state is currently spending over 24 billion euros per year on its SW budget.

If the State sees that you have made (for whatever reason and there are many reasons) very few or no contributions over the years then the next step for them is to investigate your finances to see if you can actually support yourself and your dependents at 66.

So they will ask for evidence of weekly income (Are you still working? Is your spouse working? Do you have income from a private pension? From a pension from another country? Do you have income from a property you own that’s rented out? Etc).

They will also ask for evidence of your savings shares assets etc. So they want bank statements etc and you have to declare property and land that you own that you don’t use yourself.

So when they see that someone owns a house and a farm that they’re not using themselves then it’s quite sensible for the state to say “we aren’t going to give you a weekly pension because you could either rent out that house and farm or sell the house and farm and use the proceeds to support yourself and your dependents every week. There’s no need for the state to be involved here”. It’s always open to the pensioner to reapply at any time in the future for a revised decision if the funds have diminished sufficiently.

Beware though! If you sell the property and then distribute the proceeds to loved ones and family members in order to bring yourself into the qualified bracket, SW will still refuse you as they will say you “deprived yourself of an asset”.

Your family members and loved ones could also find themselves with a gift tax issue.

Jim_Hodge

https://www.boards.ie/discussion/comment/120228064#Comment_120228064

And how did they make a living? They hardly just sat on assets with no wage being earned. This is why we have the means test.

jackboy

https://www.boards.ie/discussion/comment/120229271#Comment_120229271

You would be surprised how some people live in self inflicted poverty. You can survive for a long time on very little money if you can stick a miserable existence. That becomes less of an option as one gets older though.

TooTired123

https://www.boards.ie/discussion/comment/120229476#Comment_120229476

My experience of this is that you can sit down with the pensioner and explain to them that they do in fact have choices. In this case the person can choose to contact an auctioneer and put the house and farm up for sale, sell it, bank the proceeds and then live off the proceeds quite comfortably.

Or, they can continue eking out an existence with what little funds they appear to have.

Cold and possibly hungry (in poverty almost, as you say) but holding on grimly to their inheritance in the false expectation that the state will make an exception for them……( they’re can’t be any exceptions if we want it to be fair for everybody).

There are often mental health issues in the back ground dictating the route this will go down, but, ultimately, if people don’t want to do something they just won’t. Don’t let it bother you.

doc22

You can transf

https://www.boards.ie/discussion/comment/120228300#Comment_120228300

FYI You can freely transfer any farm assets to child as per legislation and business assets as per operational guidance to qualify for pension....

TooTired123

https://www.boards.ie/discussion/comment/120230090#Comment_120230090

This is not a working farm so it’s not a business.

doc22

https://www.boards.ie/discussion/comment/120230101#Comment_120230101

Legislation doesn't say it has to be a working farm assets...., business assets aren't mention it legistlation at all either but there you go.

Jim_Hodge

https://www.boards.ie/discussion/comment/120230090#Comment_120230090

There is no farm. It's a house with land.

doc22

https://www.boards.ie/discussion/comment/120230158#Comment_120230158

unused small farm?

Land in most cases is farmland?

TooTired123

https://www.boards.ie/discussion/comment/120230169#Comment_120230169

is it a business?

Jim_Hodge

https://www.boards.ie/discussion/comment/120230169#Comment_120230169

So, what's a farm? It's not that simple.

For example, the 1st qualification criterion for the retiring 'farmer' is

You must provide proof that you are actively farming. if you are actively farming you may qualify.

Also, the recipient must, among other things...be under 35 years of age and hold a relevant agricultural qualification

Perhaps read the rest of the regulations

doc22

https://www.boards.ie/discussion/comment/120230195#Comment_120230195

Never said it was I said farm assets as per legislation can be freely transfered to child for pension... For Business assets they made up their own internal operational rules(i.e a shop etc).

doc22

https://www.boards.ie/discussion/comment/120230204#Comment_120230204

You can own farmland without being a farmer (renting) 🙄. Where are you pulling quote that from? not the DSP anyway

Jim_Hodge

https://www.boards.ie/discussion/comment/120230195#Comment_120230195

No more so than if you or I were fortunate enough to own a house with a few acres of land.

These are non business, non farming, assets sitting idle and accruing in value. And righty should be fully assessed for state benefits.

Jim_Hodge

https://www.boards.ie/discussion/comment/120230169#Comment_120230169

Are you just making this up? That doesn't make it a farm for the farm retirement scheme .

I turned farmland in to my garden but it's not a farm. A parcel of land zone agricultural does not automatically qualify as a farm.

doc22

https://www.boards.ie/discussion/comment/120230217#Comment_120230217

What farm retirement scheme is ran by DSP? you're all confused....

doc22

If you only own a few acres around your house, it can't really be put to productive use and nil means would mostly likely apply , legislation only gives an allowance of 1 acre so it would be up to the deciding officer.

Jim_Hodge

https://www.boards.ie/discussion/comment/120230226#Comment_120230226

This reads like a wind up. The Farm Retirement scheme, or Retirement Relief, is necessary for the free transfer of farm assets you opened with.

You need to have a farm, not a bit of idle land and the recipient must also qualify.

At that, I'm out because I've better to do than repeat the same facts over and over. Give the OP the links to the requirements for this free transfer of yours.

jackboy

I got what I needed from the thread anyway. So, he can’t hold on to the farm and get some level of pension at the same time.

doc22

https://www.boards.ie/discussion/comment/120230270#Comment_120230270

Revenue and DSP are not the same, Farmland and chattels within can be freely transfered to child to qualify for social welfare. not necessarily tax free depending on relationship etc (child is 300k ish before any reliefs for child but may be CGT without reliefs) but that wasn't what the OP was asking

doc22

https://www.boards.ie/discussion/comment/120230282#Comment_120230282

He can rent the land and the capital value can't then be assessed on it only the rantal value which I persume would be far smaller. perhaps some of the family want to move or have lived in the house and are now planning to run the farm. And in such cases any transfer of said assets into the future to said member would be hard to be seen as illegitimate for SW purposes.

doc22

https://www.boards.ie/discussion/comment/120227711#Comment_120227711

Not as easy as that, Low income farmers on farm assist were denied the opportunity to put stamps up until 2007 and I believe they recieve no prsi credits for pension purposes unlike most other SW schemes.

The requirements to get a full con pension has been upped considerably over the years, requiring as little as 3 years paid prsi and an average of 20 cons/credits to recieve near full entitlement. Next year we'll move to 40 year cons required for full pension system. Everyone isn't equal.

TooTired123

https://www.boards.ie/discussion/comment/120230375#Comment_120230375

You own a piece of land and a house that you’re not using. You didn’t pay any/enough PRSI in your lifetime to get a contributory pension. Now you’re old and you need some income to live comfortably week to week. My advice is to sell the piece of land and the house and make yourself nice and comfortable with the money.

If you don’t agree with this advice and you think that there’s another route that the OP should take then you really should PM the OP with information and advice on how to move forward in a way that he can keep the property and still get a non con pension.

doc22

https://www.boards.ie/discussion/comment/120230642#Comment_120230642

I've no idea of the OPs exact situation.

But, the legislation explcitly states farmland can be transfered to children to claim pension .Likewise if an extended family member(or anyone else for that matter) wanted to farm it and pay rent, the rental value would be a fraction of the capital value. similar the housing could be derelict for all we know or if not the pensioner way want to move into it. The pensioner perhaps might want to sell the house to buy some land to rent at which point the rental value of the land would need to be 15kish to get no pension.

If you think anything I'm saying is wrong you can correct me.....