zaro

How much money can you have in the bank and still claim benefits in Ireland?

Published in Irish Social Welfare 4 mins read

In Ireland, when claiming a means-tested social welfare payment, you can have up to €20,000 in savings without it affecting your entitlement. Beyond this threshold, your savings are assessed as 'capital' and can reduce or disqualify you from certain benefits.

Understanding Means-Tested Payments and Savings

Many social welfare payments in Ireland are means-tested, meaning that the Department of Social Protection assesses your financial situation, including your income, savings, investments, and property (excluding your home). These payments are designed to support individuals and families who do not have sufficient means to support themselves.

By law, you are entitled to have a significant amount of money in savings when you are on a means-tested payment, such as Jobseeker's Allowance (JA) or Disability Allowance. Specifically, up to €20,000 in savings is disregarded for the purpose of the means test. This means that if your total assessable savings are €20,000 or less, they will not count against you in the assessment. It's important to note that these savings are not strictly limited to bank accounts; they can include money held in various forms, such as:

  • Cash
  • Bank accounts (current, savings, deposit accounts)
  • Credit union accounts
  • Post office savings
  • Shares and investments
  • Money in trust (under certain conditions)

How Savings Over €20,000 Are Assessed

If your total assessable savings exceed €20,000, the amount over this threshold is converted into a weekly value, which is then counted as part of your means. This is known as the capital means assessment. The amount of income assessed depends on the value of your capital:

Capital Value Weekly Means Assessed
First €20,000 €0
Next €10,000 (€20,001 to €30,000) €1 per €1,000
Next €10,000 (€30,001 to €40,000) €2 per €1,000
Any amount over €40,000 €4 per €1,000

Example:
If you have €35,000 in savings:

  • The first €20,000 is disregarded (€0 assessed).
  • The next €10,000 (from €20,001 to €30,000) is assessed at €1 per €1,000, so €10,000 / €1,000 = €10 per week.
  • The remaining €5,000 (from €30,001 to €35,000) is assessed at €2 per €1,000, so €5,000 / €1,000 = €10 per week.
  • Total weekly means assessed from savings: €10 + €10 = €20.

This €20 per week is then deducted from your maximum weekly social welfare payment rate.

Which Payments Are Means-Tested?

Understanding which payments are means-tested is crucial, as the rules regarding savings primarily apply to these benefits. Common means-tested payments include:

  • Jobseeker's Allowance (JA): For unemployed individuals.
  • Disability Allowance: For people with a disability.
  • One-Parent Family Payment: For single parents.
  • Supplementary Welfare Allowance: A basic payment for those with no other income.
  • Carer's Allowance: For carers who meet specific criteria.
  • Pensioners: Certain State Pensions, like the Non-Contributory State Pension.

Payments Not Affected by Savings

It's important to distinguish between means-tested payments and social insurance payments, which are generally not affected by your savings or capital. Social insurance payments are based on your (or your spouse's/partner's) PRSI (Pay Related Social Insurance) contributions. Examples of payments not affected by savings include:

  • Jobseeker's Benefit (JB): Based on PRSI contributions.
  • State Pension (Contributory): Based on PRSI contributions.
  • Illness Benefit: Based on PRSI contributions.
  • Maternity Benefit / Paternity Benefit: Based on PRSI contributions.

For these payments, the amount of money you have in the bank or in savings does not typically influence your entitlement.

Key Considerations

  • Honest Declaration: It is a legal requirement to provide accurate and complete information about your financial situation when applying for or receiving social welfare payments. Failure to do so can result in overpayments, penalties, or prosecution.
  • Changes in Circumstances: If your savings increase significantly while you are receiving a means-tested payment, you are obliged to inform the Department of Social Protection, as this may affect your entitlement.
  • Specific Payment Rules: While the €20,000 disregard is a general rule for capital assessment, minor variations or specific exemptions may apply to certain schemes. Always check the detailed rules for the particular benefit you are claiming on official government websites like Citizens Information or the Department of Social Protection.

By understanding these guidelines, individuals can manage their finances while navigating the social welfare system in Ireland.