Case Studies » Carers Allowance » Carers Allowance - Case from 2016 Annual Report (ref: 2016/19)

2016/19 Carer’s Allowance

Oral hearing

Question at issue: Eligibility (means)

Background: In 2015, the appellant made a claim for Carer’s Allowance in respect of care being provided for her son. This was rejected on grounds that her weekly means, derived from her husband’s income from self- employment as a farmer, were in excess of the statutory limit. In assessing means, the Deciding Officer referred to farm income of the order of €67,000 per annum, recorded as drawings in the accounts for 2013.

Oral hearing: The appellant was accompanied by her son, for whom she provides care. It was confirmed that the question at issue referred only to means. The appellant asserted that in assessing means from the farm holding, no account had been taken of the price drop experienced by milk suppliers. She stated that this had resulted in a significant reduction in projected gross income for 2016 and she submitted monthly statements from her local Creamery Co-Operative (Co-Op) as evidence of the drop in milk prices. She asserted that it was unreasonable to calculate means with reference to accounts for previous years when the milk price had effectively collapsed in 2016, forcing the farm enterprise to engage in further borrowing.

The appellant accepted that all other current income and expenditure was broadly in line with 2014 returns, which had formed the basis of the assessment, and she undertook to provide details. She also submitted evidence of an operating loan issued by the bank in 2016, with details of interest applied and repayments being made. She undertook to provide details of milk supply in 2015 and 2016 for comparison purposes and to illustrate why projected income was expected to fall sharply. She provided farm accounts for 2014 which recorded a net profit of some €70,000. (Further documentary evidence, as outlined, was submitted following the oral hearing.)

Consideration: The Appeals Officer noted that the profit from the holding had not been assessed and, instead, personal drawings recorded in the accounts were used. He observed that, in the assessment of means, drawings were not to be assessed without qualification. He noted that a decision maker must be satisfied that the drawings are sustainable on an ongoing basis before being assessed as means and, in addition, that the source of the funds from which the drawings are made must be examined. In this case, he noted that the drawings at issue were made up of farm income, rental income, a Revenue refund, a Value Added Tax (VAT) refund, a dividend and an insurance settlement. He observed that, of these, only the farm income was assessable as means derived from cash income as the rental income had already been considered as capital. By assessing the drawings as income, he suggested that the decision maker was attempting to assess the same source of means as both capital and as income, and he pointed out that this was not appropriate.

The Appeals Officer accepted the appellant’s contention that current yearly income was affected by the drop in prices, reducing projected milk income by some 23%, while overheads had remained largely the same. He noted that this was reflected in gross income and projected net profit. He made an assessment on this basis and concluded that the appellant had weekly means of €87.00.

Outcome: Appeal partially allowed.