State Pension (Non-Contributory) - Case 11

Background:

The appellant owned a public house which he sold in 2000 for the equivalent of €470,000 of which he transferred €200,000 to his daughters. When he claimed an old age (non-contributory) pension now known as a state (non-contributory) pension in 2005, the Deciding Officer assessed the sum transferred as means on the grounds that he had deprived himself of that income in order to qualify for a pension. He had savings of €28,000 and was assessed, therefore, with means derived from capital of €228,000.

Oral Hearing:

The appellant attended alone. The Social Welfare Inspector attended at the request of the Appeals Officer.
The Social Welfare Inspector reported that the appellant had disposed of the proceeds of the sale of his public house by giving each of his two daughters €100,000, purchasing his current home for €202,000 and investing the balance in a savings account. He said that he had accepted that the appellant had drawn on his savings for living expenses in the period 2001 to 2005 and that he had allowed some €40,000 for this. He reported also that he had confirmed the details of the transfers to his daughters with the appellant’s accountant and that the appellant had told him that he had given them the money on the advice of the accountant.

In response, the appellant outlined his reasons for giving money to his daughters. He said that the public house had been on the market for a considerable period of time so that when an offer was made in 2000 and the purchaser wanted to conclude the sale quickly he was keen to do so. He reported that one of his daughters was building a house, by direct labour, on a site next to the pub. The buyer sought to acquire the site with the partly completed house and it was agreed that all the property would be sold. The appellant further agreed to help his daughter to buy an alternative home. He said that, when his daughter secured a house locally for €140,000, he gave her €100,000 towards the purchase price.

The appellant reported that he wanted his second daughter to buy a house also and that he had been willing to help her as he had his older daughter. He said, however, that her efforts to secure a house had failed for a number of reasons and that ultimately, he had given her €100,000 as a family settlement. The appellant submitted that it was his wish to treat his daughters equally and to give them the money at that stage in their lives when they would have a need for it, rather than waiting until after his death. He said that he had acted on the advice of his accountant and his desire to execute a family settlement. The Social Welfare Inspector stated that he had not been aware that the appellant’s eldest daughter had been given money to buy a house in lieu of the partly constructed house at the site of the family public house.

Consideration of the Appeals Officer:

The Appeals Officer referred to the legislation which deals with the question of deprivation of income or property in order to qualify for pension, or to obtain pension at a higher rate [1] . He considered that, in deciding if any income or property is assessable as means under that provision, account must be taken of the person’s motivation in so depriving themselves of the income or property. He took the view that this issue had not been addressed when deciding the appellant’s case.

The Appeals Officer noted that the appellant had applied for the pension in 2005 whereas the monies in question had been given to his daughters in 2001. He noted also that the sale of his property had included a partly completed house which was being built by his daughter and that he had compensated her for this by giving her money to buy an alternative house. He considered that monies given to his other daughter were such as to effect a family settlement.

The Appeals Officer noted also that when the family settlement was transacted, the appellant was already in receipt of a reduced old age (contributory) pension now known as a state (contributory) pension and that he had hoped to supplement this by way of casual work and the balance of the proceeds from the sale of his property. This he had done until 2005 when his capital had decreased and his ability to earn from casual work diminished. The Appeals Officer concluded that the legislative provisions referring to deprivation of income did not apply in this case and determined that the only means assessable was the capital held by the appellant by way of savings.

[1] Social Welfare (Consolidation) Act, 2005 (Rule 2(1) of Part 3 of the Third Schedule)

Outcome:

Appeal allowed.