Capital and social welfare payments

Rules

To find your means from capital, first you must calculate your total capital value. This means adding together all your sources of capital (for example, property, savings and investments). Then apply the relevant formula below.

The formula for assessing the means from capital for all social welfare payments (except Disability Allowance and Supplementary Welfare Allowance) is as follows:

Capital	Weekly means assessed
First €20,000	Nil
Next €10,000	€1 per €1,000
Next €10,000	€2 per €1,000
Balance	€4 per €1,000

The formula for assessing the means from capital for Disability Allowance is as follows:

Capital	Weekly means assessed
First €50,000	Nil
Next €10,000	€1 per €1,000
Next €10,000	€2 per €1,000
Balance (any capital over €70,000)	€4 per €1,000

The formula for assessing the means from capital for Supplementary Welfare Allowance is as follows:

Capital	Weekly means assessed
First €5,000	Nil
Next €10,000	€1 per €1,000
Next €25,000	€2 per €1,000
Balance	€4 per €1,000

Property

The home in which you live is not included in the assessment of your means from capital unless you are getting an income from it. If you are getting an income from your home (for example, if you have rented a room in the house) that income is assessed. However, income from renting a room in your home is not assessed if you are getting a State Pension (Non-Contributory) or a Widow's, Widower's or Surviving Civil Partner's (Non-Contributory) Pension and not renting the room means that you would be living alone.

Selling your home

If you sell your home, the proceeds of the sale would normally be taken into account as means. If you are living in accommodation which no longer suits you or which you are no longer able to maintain, you may be able to sell your home and move to more suitable accommodation and have up to €190,500 of the proceeds of the sale exempt from the means test.

This exemption of €190,500 only applies if you are getting certain social welfare payments and sell your house in order to move to more appropriate accommodation to meet your needs.

To qualify you must be getting one of the following payments:

• State Pension (Non-Contributory)
• Widow's, Widower's or Surviving civil Partner's (Non-Contributory) 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 (DA)
• Blind Pension (BP)

The exemption of €190,500 only applies if you are getting one of the above social welfare payments and sell your house in order to:

• Buy or rent more suitable alternative accommodation
• Move into a private nursing home which is registered under the Health (Nursing Homes) Act 1990
• Move in with a person who getting a carer's payment to care for you
• Move to sheltered or special housing in the voluntary, co-operative, statutory or private sectors

Usually the first €190,500 of the sale proceeds is not taken into account. However, if you use the proceeds of the sale to buy more suitable accommodation, the balance of the proceeds after buying the new accommodation is exempt up to a limit of €190,500.

Investment income from the sale of your home

Any benefit you get from investing the sale proceeds is assessable as means. Interest which is kept as capital is assessable in the same way as capital is normally assessed.

However, the Department of Social Protection states in its Operational Guidelines on Means Assessment that an allowance should be made where a person has significant maintenance expenses, such as nursing home costs, which are met out of interest payments. In such cases, only the interest on the exempted capital (up to a maximum of €190,500) may be disregarded as means.

Leaving your home but not selling
If, due to old age or incapacity, you leave your home either on a temporary basis or indefinitely, the value of your home will not be assessed as means. However, if it is put to profitable use (for example, rented out), the capital value of the house will then be assessed as means.

Second homes

Capital value: The home in which you live is not included in the assessment of your means from capital – see above. If you own a second house and the house is let, you will be assessed on the capital value of the property. You will not be assessed on the income from the letting. Any outstanding mortgage registered against the property is deducted from the market value to find the capital value.

However, if the mortgage on the home in which you live has been re-structured to raise capital to buy the second property, this re-structured mortgage will not be deducted from the capital assessment of the second property.

More information about the assessment of capital as means can be found on the DSP website.

Rental income: If you have a life interest in a property the rental income is assessed instead of the capital value.

Where property is owned jointly or only by your spouse/partner rental income will be assessed for payment of an Increase for a Qualified Adult with your social insurance payment. However, the capital value will be assessed if the property is not rented – see ‘Capital value’ above.

Rental income is assessed as cash in the means test.