Means Tests I
Tests
There are a number of means tests applicable to social welfare benefits. Â Similar principles underlie the various tests. Â There are different tests between shorter-term and longer-term payments and supplementary welfare allowance.
Each of the means tests is based on an assessment of income and assets. Â Generally, assets owned by the person and his spouse are considered.
Income which the person might reasonably be expected to receive is included. In some cases, the value of benefits in kind is taken into account. Â Each test also has regard to certain assets which a person has deprived himself of in order to qualify for assistance.
Means Assessed
All income in cash and non-cash benefits of the claimant and spouse are assessed.
Generally, means tests take account of the assets and property of the claimant for the benefit, his spouse or persons living together as a couple.  This requires a marriage or marital  type relationship.
The same test applies to jobseekers’ allowance, pre-retirement allowance, disability allowance and Farm Assist.In calculating a person’s means a percentage of capital is notionally deemed to be means. Personal use property or a farm leased is excluded.
The value of property belonging to the person which is invested or otherwise put to profitable use or is not so invested or put to profitable us, but is capable of being so invested or used, is assessed and deemed as means. The actual income from the asset is irrelevant.
Value of Property / Capital
Generally, property which a person owns is taken into account in the means tests.  Property which is personally used or enjoyed is generally not taken into account. This would include the person’s home.
The value of property which is invested or is capable of profitable use is taken into account and assessed. In order to avoid its being taken into account, it must be shown that it is incapable of being invested or profitably used.
In certain of the tests the income assessed may be that which might reasonably be received during the relevant years.  Where property is capable of being invested  it will be assessed.
There are different scales for classes of  assets taken account in converting the value of assets into income for the purpose of the means test.  The tests provide for artificial factors that are not  necessarily related to actual income.  In effect some of these are quite high and would appear to require sale of assets to derive the assessed income.
Residence
In the case of payments to older and disabled persons the gross proceeds of sale of a  house up to €190,460 are disregarded where it is  sold to enable a person to move into alternative accommodation whether purchased or rented) or a nursing home.  The gross proceeds mean the difference between the value of property, or the price of property sold and purchased.
The replacement property must be used for the persons only or main residence In other cases, the purpose must be to move into a private nursing home, move in with a party who receives carers allowance or benefit for caring for the person concerned, or move into sheltered or special housing in a voluntary co-operative sector.
Income
Income taken into account includes all income in cash and benefits in kind.  Under  each means test certain types of income are excluded.  Generally, however all income is counted.
Expenditure is not generally counted except in the context of direct expenses related to generation of the income. Loan repayment may not be taken into account in many cases.
The position differs between the various means tests. Â Generally, the income is that actually received in the previous years. Where income is received in a different years to that in which it is deemed earned, then it is generally attributed to the year to which it relates, rather than the year of receipt.
Certain  welfare benefits are taken account of.  Tests also take account of the benefit of value of benefits and privileges received.  This broadly speaking equivalent to a benefit in kind. The value of any benefit privilege or  advantage includes the use value of property other than a personally occupied dwelling or content.
Classification of Income
The classification on income may be difficult in some cases and the Department may rule as to the position. It appears that income from illegal sources is counted.
Where property is capable of being invested or returning an income the deciding officers may assess the same as income.  Whether and to what extent  a particular asset should be assessed will depend on the market or what is reasonable in the circumstances.
The concept of income is similar to that in an income tax context. It is to be given its ordinary meaning. In some cases, the distinction between income and capital may be difficult to draw. The regularity of payment is a significant factor. The source is relevant it that may be an income or capital  substitute. Artificial repackaging is unlikely to change its nature. A life interest may be deemed income while a capital interest in respect of which the trustees pay or advance is likely to retain its character as capital
Property capable of being invested or being used to generate a profit may be assessed in respect of such income. The circumstance will determine whether it is practical to generate an income by renting or sell the asset. Personal circumstances may be relevant.
Excluded Income
A certain amount of capital is excluded.  This is generally €20,000. A higher exclusion applies to disability allowance; €50,000. An exemption arises from the proceeds of the sale of a dwelling in which the claimant resided,  subject to certain conditions. Where the house is vacated temporarily, or due to age or incapacity vacated for sale up to two years on market is excluded.
There are a range of exclusions some of which are set out below:
- Higher education grant
- Maintenance payments for self and child in so far as they do not exceed annual housing cost actually incurred by the person subject to a maximum prescribed together with half of any amount of maintenance in excess of the amount disregarded for housing cost actually incurred.
- Expenses reimbursed in certain approved courses of education and training
- In the case of jobseekers’ allowance, pre-retirement allowance, monies earned in a personal employment.
- In the case of Farm Assist earnings in employment subject to conditions.
- In the above cases monies earned by the person or his spouse from insurable employment of a seasonal nature.
- Prescribed amount of earnings of spouse from insurable employment
- In relation to disability allowance prescribed amounts of earnings from employment or self-employment of a rehabilitative nature.
- In the case of jobseekers’ allowance, pre-retirement allowance and Farm Assist income received from the REP scheme the special area of conservation scheme and equivalents within certain amounts.
- In the case of jobseekers’ allowance and pre-retirement allowance subject to conditions, income received by a fisherman in self-employment.
Income is assessed on a previous year basis. Â The yearly value of advantages accruing from the use and enjoyment of property other than a dwelling house furniture personal effects or farm building that is personally used are enjoyed by the person or a farm leased from by the person is assessed.
Assets Transferred
All income which a person directly or indirectly deprives himself of,  in order to qualify for the allowance is excluded.  Where the value of the property disposed of reduces the calculation of the deemed income, that may be revised and reassessed.
Where  a person deprives himself of income or property in order to attempt to qualify for an allowance, it is  taken into account as means. The entire circumstances are relevant in ascertaining whether there is an intention to deprive oneself of assets or means with the intention of qualifying for a benefit.
In the case of the state pension this is not applied to an assignment to a child consisting of a farm subject to conditions.  A transfer may be permissible when the farm or business is transferred as a result of age and health reasons and is part of a genuine family settlement.
Child Maintenace Not Assessed
Social Welfare (Liable Relatives and Child Maintenance) Act 2023
Child maintenance payments are not assessed in the means tests for various Social Welfare schemes:
- child maintenance payments will not be assessed in the means tests for jobseeker’s allowance, pre-retirement allowance, disability allowance or farm assist.
- child maintenance payments will not be assessed in the means test for state pension (non-contributory).
- child maintenance payments will not be assessed in the means test for supplementary welfare allowance.
- child maintenance payments will not be assessed in the means test for rent supplement.
- child maintenance payments will not be assessed in the means tests for blind pension, widow’s (non-contributory) pension, widower’s (non- contributory) pension, surviving civil partner’s (non-contributory) pension, guardian’s payment (non-contributory), one-parent family payment or carer’s allowance.