THE State Pension (Non-Contributory) is a means-tested payment. The Department of Social Protection examines all your sources of income to get a State Pension (Non-Contributory) - your income must be below a certain amount. The main items included in the means test are:
Cash income that you or your spouse, civil partner or cohabitant may have. Some cash income may not be included in the means test. You can check this with your local Citizens Information Centre
Capital, for example, the value of savings, investments, shares or any property you have, but not your own home. The first €20,000 of your capital is not taken into account
Cash income
Any cash income you have is assessed in the means test. This includes any social security pension from another country. However, some types of cash income are not considered in the means test. For example, you can earn up to €200 per week from employment (but not self-employment) and it won’t affect your pension. Your spouse, civil partner or cohabitant can also earn up to €200 per week. Any income from work above this amount is assessed in the means test.
Blind Welfare Allowance is not included in the means test.
Farm land owned or leased
Your net income from farming or leasing land is assessed as income in the means test. Your net income is worked out by taking your gross income (your income before tax) and deducting your expenses. If you own land that is not productively used or leased, it is assessed on its capital value payments you get under the Farm Retirement Scheme and income from property that has already been assessed on its capital value are not taken into account in the means test.
Information about how income from farming is assessed is available on gov.ie.
Capital and property
Savings, investments, cash on hand and any property you own (but not your own home) is assessed as capital.
If your property is assessed on its capital value, then income from that property (such as rent) is not assessed in the means test.
If you or your spouse, civil partner or cohabitant saves a portion of your State Pension (Non-Contributory) each week, these savings as well as savings from most other sources will be taken into account in the means test.
All your capital from different sources is added together and a special formula is then used to find your weekly means from capital.
Disability Allowance and the State Pension (Non-Contributory)
The means tests for Disability Allowance (DA) and the State Pension (Non-Contributory) use different rules to assess capital. But if you are moving from DA to the State Pension (Non-Contributory) at 66, you will not get a lower-rate pension due to a less favourable assessment of capital.
Income from your home (such as rent)
The value of the house you live in is not taken into account in the means test. Income you are getting from your home (for example renting a room) can be taken into account. However, the following exceptions apply:
You are living alone: If renting out the room means you would not be living alone, your income from rent is not taken into account.
You are not living alone: You can get up to €269.23 a week (€14,000 per year) from renting a room in your home without it affecting your State (Non-Contributory) Pension. The person renting in your home must use the room for a minimum of 28 consecutive days and not be an employee or immediate family member.
You should check if renting a room in your home will affect your Fuel Allowance.
The Accommodation Recognition Payment for hosting refugees from Ukraine is not assessed in the means test for the State (Non-Contributory) Pension.
Selling your home
If you sell your home, the money you make from the sale (the proceeds) would normally be taken into account in the means test. However, you may be able to sell your home because it is no longer suitable for you (or you cannot maintain it) and have up to €190,500 of the proceeds of the sale excluded from the means test. The exemption of €190,500 applies, if you sell your house to:
Buy or rent more suitable alternative accommodation
Move into a private nursing home registered under the Health (Nursing Homes) Act 1990
Move in with a person who is getting a carer’s payment to care for you
Move to sheltered or special housing in the voluntary, co-operative, statutory or private sectors
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.
However the proceeds of the sale may be taken into account by the Health Service Executive (HSE) when your entitlement to the Fair Deal Scheme is being assessed.
Investing the income from the sale of your home
Any benefit you get from investing the proceeds from the sale of your home is taken into account in the means test.
If you invest the money you make from selling your home (the proceeds), any interest you make on the investment is taken into account in the means test and assessed as capital.
However, if you rely on interest payments to pay major expenses, such as nursing home costs, the DSP can exclude the interest, on the exempted capital, up to a maximum of €190,500.
Leaving your home but not selling
If you leave your home (on a temporary basis or indefinitely) due to old age or being unwell, the value of your home will not be assessed in the means test. However, if you get an income from it (for example, if you rent it out), the capital value of the house will then be taken into account in the mean test.
Total means
Your cash means and capital means are added together to see what level of pension you will get, if any. If you are half of a couple (married couple, civil partners or a cohabiting couple) your means are taken to be half of the total means of yourself and your spouse, civil partner or cohabitant.
You can have savings or assets of up to €20,000 and earnings of up to €200 per week from employment and still qualify for a full State Pension (Non-Contributory).
The first €30 per week of means does not affect the rate of your pension. After that first €30, your pension is reduced by €2.50 for every €2.50 of means.
The Farm Assist and for the State Pension (Non-Contributory) means tests are different. But if you are moving from Farm Assist to the State Pension (Non-Contributory), and the different means tests would result in you getting a lower pension payment, you keep the higher payment.
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