Rules

You may qualify for the State Pension (Non-Contributory) if:

• You are aged 66 or over
• You do not qualify for an State Pension (Contributory)
• You pass a means test
• You meet the Habitual Residence Condition

The means test

Your means are assessed using specific rules under the following headings:

• Cash income (including income from work)
• Value of capital (for example, savings, investments, cash on hand and property but not your own home)
• Income from property personally used

Cash income

Any cash income you have is assessed in the means test. This includes income from a social security pension from another country. However, certain items of cash income are not taken into account in the means test. For example, earnings of up to €200 per week from employment (but not self-employment) are not taken into account (or are disregarded). This disregard applies to both you and your spouse, civil partner or cohabitant. Any income from work above €200 is assessed as means.

Payments you get under the Farm Retirement Scheme and income from property that has already been assessed on its capital value are also not taken into account.

More information is available in our document about cash income not taken into account in the means test.

Capital and property not personally used

Savings, investments, cash on hand and any property you own (but not your own home) is assessed as capital. All your capital from different sources is added together and a special formula is then used to find your weekly means from capital.

The property and investments that may be assessed under this heading include savings in a bank account (or anywhere else), a house that you have let and stocks and shares. You may or may not be getting an income from the property or investment. Income from property already assessed on its capital value is not assessed in the means test - see 'Cash income' above.

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 as part of your means.

More information is available in our document on how capital and property is assessed as means.

Different rules for the assessment of capital are used in the means tests for Disability Allowance (DA) and State Pension (Non-Contributory), this means, people moving from DA to State Pension (Non-Contributory) at age 66 could find that their pension is lower than their DA. The Social Welfare and Pension Act 2008, provides that, if you are moving from Disability Allowance (DA) to State Pension (Non-Contributory) at age 66 you will not get a lower rate pension because of a less favourable assessment of capital.

Income from property personally used (your home)

The value of the house you live in is not taken into account in the means test. However, any income you are getting from it is taken into account. For example, if you rented a room in your house, that income is assessed. There is an exception to this, if not renting the room means that you would be living alone then your income from rent is not taken into account.

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 excluded from the means test. This exemption of €190,500 applies if you 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 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

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.

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 for nursing home care is being assessed.

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.

Total means

Your means under the various headings are added together to see what level of pension, if any, you can get. If you are one half of a couple (married couple, civil partners or a cohabiting couple of the same or opposite sex) then your means are taken to be half of the total means of yourself and your spouse/civil partner/cohabitant.

The first €30 per week of means as assessed by the Department of Social Protection does not affect the rate of pension. After that, the pension is reduced by €2.50 each week for every €2.50 of means.

If you are getting Farm Assist and the different means test that applies to the State Pension (Non-Contributory) results in you getting a lower level of payment, you keep your entitlement to the higher amount.

Married, civil partners and cohabiting couples

When your spouse, civil partner or cohabitant reaches 66 you will no longer get an increase in your payment for them as a qualified adult. However, he or she may apply for a State Pension (Non-Contributory) in his/her own right.

From 27 September 2007, if you are getting State Pension (Non-Contributory) the Increase for a Qualified Adult will be paid directly to your adult dependant. This only applies to applications for state pensions received by the Department of Social Protection after 27 September 2007.