Capital and social welfare payments

If you are applying for a social assistance payment, you must pass a ‘means test’. In the means test, the Department of Social Protection (DSP) assesses all your sources of income, including:

• Cash income
• Employment
• Capital
• Maintenance

Capital is any property you own (except for your own home), as well as any savings, investments, stocks, and shares. The DSP will also look at any capital belonging to your spouse, civil partner, or cohabitant.

This page explains how the DSP assesses your means from capital for social welfare payments (except the Working Family Payment, as capital is not assessed in this income test).

Read more about the means test and which income is taken into account.

To find your means from capital, first you must calculate your ‘total capital value’.

You do this by:

1. Adding together all your sources of capital (for example, property, savings, and investments).
2. Then you apply the relevant formula (see below).

Means from capital for most social welfare payments

Use the following formula to assess your ‘means from capital’ for all social welfare payments (except Disability Allowance, Carer's Allowance, and Supplementary Welfare Allowance):

Means of capital from Disability Allowance and Carer’s Allowance

Use the following formula to assess your means from capital for Disability Allowance and Carer's Allowance:

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.

Means of capital from Supplementary Welfare Allowance

Use the following formula to assess your means from capital for Supplementary Welfare Allowance:

Your own home

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 that income is assessed.

However, some income from renting a room in your home is not taken into account in the means test. You can find more information about how income from rent is assessed in the means test.

Selling your home

If you sell your home, the proceeds of the sale are normally taken into account as means.

However, if you live in accommodation which no longer suits you, or which you are no longer able to maintain, you may choose to sell your home and move to more suitable accommodation. In this case, up to €190,500 of the sale proceeds is exempt from the means test.

This exemption only applies if you are getting one of the following payments:

• State Pension (Non-Contributory)
• Disability Allowance
• Blind Pension

In addition, you must be selling 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. Any interest paid and retained is assessable as capital.

However, the Department of Social Protection’s Operational Guidelines on Means Assessment say an allowance should be made where you have significant maintenance expenses, such as nursing home costs, which are met out of interest payments. In this case, 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 temporarily 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 and income from lettings

The home in which you live is not included in the assessment of your means from capital (see above). If you own a house which is let, you are 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.

For all second homes, the property must be capable of being sold, let or put to profitable use before a capital value assessment is applied.

Read more about the assessment of capital as means on gov.ie.

Situations where rental income is assessed

Usually, income from renting a property is not assessed. However, there are some situations where rental income is assessed:

• If you have a life interest in a property, the DSP assesses the rental income instead of the capital value.
• If you are claiming an increase for a qualified adult with your social insurance payment, and if your spouse, civil partner or cohabitant owns property (in their own right or jointly with you), then the DSP assesses rental income from this property for payment of an Increase for a Qualified Adult. This rental income is assessed as cash in the means test, and the capital value of the property is not assessed. However, the capital value will be assessed in the normal way if the property is not rented – see ‘Capital value’ above.
• If you apply for Working Family Payment (WFP), the DSP will take rental income from the letting of property or land into account when assessing your income (the capital value is not assessed).

If you have a joint account with your spouse, civil partner or cohabitant, legally the total amount in the account is owned by each of you. This means it could be assessed in full against each of you.

However, if you and your spouse, civil partner or cohabitant are both getting means-tested social assistance payments, it will be assessed either on a shared basis or against only one of you.

You can read more about assessing the means of a couple for social assistance payments.

Using the table below, find your total capital value and your weekly means as assessed by the Department of Social Protection (except Disability Allowance, Carer's Allowance and Supplementary Welfare Allowance).