Know Your Rights: 2014 Social Welfare, Health and Taxation

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Know Your Rights

2014 Social Welfare, Health and Taxation

In every situation information is the key to understanding,discussing, interpreting or attaining your rights. Here,Andrew provides that key.

Dermott Jewell, Chief Executive, Consumers Association ofIreland

In an age of great uncertainty, having an intimate knowledgeand understanding of ones rights is an essential life tool.Andrew McCann provides this in spadefuls, and he does itin a very understandable and straightforward manner.

Jim Power, Economist


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Disclaimer and Waiver of Liability

Whilst every effort has been made to ensure the accuracy ofthe information and material contained in this book, never-

theless it is possible that errors or omissions may occur in thecontent. The author and publishers assume no responsibil-ity for and give no guarantees or warranties concerning theaccuracy, completeness or up-to-date nature of the informa-tion provided in this book. The author and publishers do notaccept any liability for the consequences of any actions taken,legal or otherwise, on the basis of the information provided inthis book. This book is not a complete source of information

on all aspects of social and civic rights. If you need profes-sional or legal advice you should consult a suitably qualifiedperson.


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Know Your Rights

2014 Social Welfare, Healthand Taxation

Andrew McCann


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Dedication

This book is dedicated to my wife Nollagh McCann, who died inNovember 2013 after a short illness, aged 41. Nollagh was my best

friend, my rock, my drive, my focus, my ambition and my true love.She supported and pushed me to further myself with my educational

qualifications, career and projects (including the Know Your Rightsseries) and waited patiently for me to complete each Know Your Rightsbook. Working on this book over the last couple of months has assisted mein some small way to cope with my great loss and this void in my life. I

know she would have pushed me and wanted me to do this edition, and inher own way she has helped and guided me through this difficult period.

I am donating all my royalties from this book to the Sunflower Chernobyl

Appeal (Dublin Group) (www.chernobylchildren.ie). This project is anot-for-profit registered charity which has no staff or administrationcosts and all the work is carried out on a purely voluntary basis. Every

single cent raised is used directly to support this charity. In light ofthe recent controversy in the news regarding funding of charities I am

pleased to have been and still be actively involved with this charity. Thecharity brings children in need of respite to Ireland from Belarus, andthe children are hosted by Irish families during their stay. In addition,funding for this project will also assist in improving the condition of

orphanages in Belarus and improving the lives of the children whoreside there. I am planning and looking forward to visiting Belarus and

assisting with the work at the orphanages in 2014.

Finally I would like to take this opportunity to thank all the staff ofBeaumont Hospital, Dublin (including ICU) for caring for my wife

during her difficult time and to thank everyone for their kind thoughtsand words, prayers, comfort and support.


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About the Author

Andrew McCann is the author, since 2006, of the annual

publication Know Your Rights(Orpen Press), now in its ninthedition, and is an advocate since 2002.

Andrew is a regular contributor on TV (TV3 Ireland AM),national radio (2FM Colm Hayes Show and previously ontheGerry Ryan Show;Newstalk 106108 FM Pat Kenny ShowandLunchtime with Jonathan Healy), regional radio (HighlandRadio Shaun Doherty Show) and local radio.

Andrew has also published articles in national newspa-pers (Irish Examiner and The Sun) and in magazines (You &Your Money). In addition, Andrew has completed consultancywork for large pharmaceutical companies and employersas well as lecturing to medical consultants and practition-ers. Andrew has represented clients at Rights Commissionerhearings, Employment Appeal Tribunals, Equality Mediationhearings and Social Welfare Appeals.

Andrew McCann holds a Bachelor of Arts in Law(Dublin Institute of Technology) and is a graduate of theMarketing Institute of Ireland. He has also successfully com-pleted a Higher Certificate in Advocacy (Sligo Institute ofTechnology) and has a Certificate in Management Skills forManagers of Advocacy Services (Institute of Technology,Blanchardstown). He has also completed a Diploma in SocialStudies and accredited training in the area of mediation.

Previously Andrew worked as a management consultant inthe area of customer relationship management and for a largetelecoms company in various roles.


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About the Author

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Andrew has also written additional publications in the areaof employment and family law (Know Your Rights: Employmentand Family Rights) and consumer rights (Know Your Rights:Consumer Rights), both published by Orpen Press.

Andrew lives in Kinsealy, Malahide, Co. Dublin.


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Contents

Introduction ..................................................................................... xiii

Chapter 1: Social Welfare A Simple Guide toHow It Works............................................................... 1

Rates of Payment 2014 .......................................................... 1Eligibility for Social Welfare Payments ............................. 2

Contribution-Based Payments ........................................ 2Means-Tested Payments ................................................. 6Occupational Injury Benefits .......................................... 7Minimum Eligibility Payments (SWA) ......................... 7Multiple Social Welfare Payments ................................. 9Assessment for a Spouse, Partner or Civil

Partner and/or Children .............................................. 9Habitual Residence ......................................................... 10Special, Exceptional and Urgent Needs

Payments ..................................................................... 13Free Schemes .......................................................................... 13

Fuel Allowance ............................................................... 13

Free Travel ...................................................................... 14Household Benefits Package ............................................ 15Living Alone Allowance ................................................. 17Free Driving Licence ....................................................... 17

Other Information ................................................................. 18Social Welfare Appeals .................................................... 18Overpayment .................................................................. 20Reporting Fraud.............................................................. 21


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Chapter 2: Work and Education Supports andEntitlements................................................................. 23

Unemployment Support Payments .................................... 23

Jobseekers Benefit ........................................................... 25Jobseekers Allowance ..................................................... 41Help for the Self-Employed ............................................. 51

Education ................................................................................ 52Enterprise Initiatives ............................................................. 62Employment and Educational Initiatives .......................... 64

JobsPlus Programme ....................................................... 64JobBridge ......................................................................... 66

Work Placement Programme (WPP) .............................. 67Work Activation ............................................................. 67SpringBoard .................................................................... 68MOMENTUM Programme ........................................... 69Ts .................................................................................. 69Community Employment (CE)....................................... 70Gateway Local Authority Social Employment

Scheme ......................................................................... 71EURES (European Employment Services) ..................... 72

Subsidised After-School Child-Care Scheme .................. 72

Chapter 3: Family Supports and Entitlements....................... 75Family Income Supplement ................................................. 75One-Parent Family Payment ............................................... 78

Existing Claimants (prior to 27 April 2011) .................. 79Existing Claimants (after 27 April 2011) ...................... 80New Claimants (since 4 July 2013) ................................ 80Exceptions ....................................................................... 80Transitional Arrangements (Ceasing OPF on

Child-Related Age Grounds) ....................................... 81Case Study 1 ................................................................... 82Case Study 2 ................................................................... 83

Child Benefit .......................................................................... 84Back to School Clothing and Footwear Allowance .......... 86Maternity Leave and Benefit ............................................... 89Rent Supplement and Mortgage Interest Supplement .... 92

Rent Supplement Assessment Example 1....................... 95Rent Supplement Assessment Example 2....................... 97

Widow(er)s or Surviving Civil Partners FinancialSupports .............................................................................. 100

Bereavement Grant ......................................................... 101


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Chapter 4: Illness, Disability and Carers Supports................ 103Illness Payments .................................................................... 103

Injury Benefit .................................................................. 104

Illness Benefit .................................................................. 105Partial Capacity Benefit .................................................. 110Invalidity Pension ........................................................... 115Disability Allowance....................................................... 117

Care Supports ........................................................................ 122Home-Based Supports ..................................................... 122Employing a Carer ......................................................... 123Nursing Home Support Scheme (Fair Deal) ................ 123

Grants for House Improvements .................................... 130Carers Payments .................................................................. 134Domiciliary Care Allowance ........................................... 134Respite Care Grant ......................................................... 136Carers Benefit................................................................. 137Carers Allowance ........................................................... 139

Medical and GP Visit Cards ................................................ 140Medical Cards for the Over-Seventies ............................ 152

Long-Term Illness Scheme and Drugs Payment

Scheme ................................................................................ 154Accident and Emergency (A&E) and Hospital Charges . 156

Chapter 5: Pensions ........................................................................ 161Widow(er)s or Surviving Civil Partners Pensions ......... 161

Contributory Pension ..................................................... 161Non-Contributory Pension ............................................. 164

State Pensions ........................................................................ 166State (Contributory) Pension ......................................... 168State (Non-Contributory) Pension ................................. 182Additional Benefits ......................................................... 188

Chapter 6: Tax How to Calculate and Reduce YourTax Bill.......................................................................... 189

Budget 2014 Income Tax Rates, Bands and Credits ...... 189Universal Social Charge and Taxes .................................... 190

Universal Social Charge (USC) ...................................... 190

Emergency Tax ............................................................... 193PRSI ................................................................................ 193Health Levy and Private Health Insurance .................... 195Self-Employment............................................................. 196Income Tax ...................................................................... 197


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Civil Partners ......................................................................... 198Single Persons ........................................................................ 198Single Parents ........................................................................ 204

Married Couples/Civil Partners (One Income) ................ 210Married Couples/Civil Partners (Two Incomes) ............. 214

Single Assessment .......................................................... 215Joint Assessment ............................................................. 216

Widow/Widower or Surviving Civil Partner .................. 218Marginal Tax Relief ............................................................... 220Taxation on Social Welfare Payments ................................ 223Rent Relief .............................................................................. 224

Medical Expenses .................................................................. 225Rent-a-Room Scheme ............................................................ 229Childminding Relief ............................................................. 230Tax Relief for Disabled Drivers and Passengers ............... 231Provision of Bicycles ............................................................. 232Tuition Fees ............................................................................ 232Deposit Interest Retention Tax (DIRT) ............................... 233Tax on Redundancy .............................................................. 234Dependent Relative Allowance ........................................... 236

Employing a Carer ................................................................ 236Incapacitated Child Allowance ........................................... 237Tax Credits (Clothing) .......................................................... 238PAYE Online .......................................................................... 239Tax Relief on Mortgages....................................................... 240Stamp Duty (Property) ......................................................... 242Home Renovation Incentive (HRI)/Home Heating ........ 243Excise Duty............................................................................. 245

Pensions .................................................................................. 246Household Charge ................................................................ 246Local Property Tax ................................................................ 248Water Charges ....................................................................... 255Septic Tank Charges ............................................................. 257Capital Acquisitions Tax (CAT) and Capital Gains

Tax (CGT) ........................................................................... 258Tax Returns ............................................................................ 264


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Introduction

Know Your Rights 2014 Social Welfare, Health and Taxation,

now in its ninth edition, is needed now more than ever.Budget 2014 affects every person in Ireland through theimplementation of the full year of the Local Property Taxand increases in medication costs for people with MedicalCards, as well as cuts in Child Benefit and the removal ofthe Bereavement Grant. In addition, there are increases inPRSI, heating costs (coal), cigarettes and alcohol, as well as

reductions in the Household Benefi

ts Package, i.e. the aboli-tion of the telephone allowance. Finally, we will also see achange in eligibility for the social welfare sick/injury payscheme (Illness/Injury Benefit) where the waiting periodhas increased from three to six days, standardisation of theMaternity and Adoptive Benefit rate, reduction in paymentsto the young unemployed under the age of 26 and increasesin Deposit Interest Retention Tax. Therefore nobody is unaf-

fected. Know Your Rights 2014 Social Welfare, Health andTaxation also includes changes announced in the Finance (No.2) Bill 2013, to be passed shortly.

The forecasted Budget expenditure for 2014 is 49.61 bil-lion, with income expected to be only 42.02 billion, leaving adeficit of 7.59 billion. Translating this to our own householdincomes, we are still spending more than whats coming in.Therefore, if that is our household situation, what can we doto make things better? Know Your Rights 2014 Social Welfare,Health and Taxation will help you to identify ways to reduceyour tax liability, thus increasing your net pay after tax, as


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well as highlighting financial supports for both you and yourfamily to increase your weekly income and reduce your out-goings. So, quite simply, this book is your savings plan for2014 and hopefully it is well worth the investment!

Chapters 1, 2 and 3 examine the complex area of social wel-fare. Expenditure under the Department of Social Protectionwill be 19.63 billion in 2014. Chapter 1 explains the basisof the welfare system and the key differences between PRSIcontribution-based and means-tested payments, as wellas the universal benefit payment of Child Benefit. In addi-

tion, Chapter 1 also discusses credited contributions, theSupplementary Welfare Allowance (SWA) payment, habitualresidency conditions and EU family benefits. Finally, thischapter examines secondary benefits as well as the complexarea of social welfare appeals, overpayments and reportingfraud. Tip-offs for fraud have increased by 2,500 per centsince 2008. The Minister for Social Protection projects savingsof 30 million in 2014 by reducing fraud and overpayments

and tightening control mechanisms.Chapter 2 examines the area of unemployment and sup-

port for returning to work or education. With 12.8 per cent ofthe population, equating to just under 377,000 people, unem-ployed (in December 2013), this is a vast area of need and inthis chapter we show clear examples of financial supports forthose who are unemployed, suffer partial loss of employment

or return to part-time employment. The Minister for SocialProtection implemented 32 million of cuts in 2014 in the areaof Jobseekers Allowance through reducing payment rates topeople under the age of 26.

Chapter 2 also examines the maintenance grant system forstudents, including mature students planning to return tocollege, both full-time and part-time, for the academic year2014/2015. Finally, this chapter examines all the employment

and education initiatives available to help eligible personsgain valuable experience and educational opportunities toretrain, as well as financial incentives for employers to hire


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unemployed persons (JobsPlus). The Minister for SocialProtection has invested 1.6 billion in support for activationprogrammes.

Chapter 3 examines family support payments, includingFamily Income Supplement (FIS) and the One-Parent FamilyPayment. The One-Parent Family Payment has seen majorreform over the last two years, with the ultimate aim of reduc-ing both earnings exemptions and payments to all one-parentfamilies, regardless of how long they are on the payment, tothose whose children are aged seven or over by 2015. This

chapter also contains details on the transitional arrangementfor parents who cease the One-Parent Family Payment (due tothe age of their children) and the new Jobseekers AllowanceTransition Payment, as well as clear case studies assessingincome from employment and maintenance payments andthe impact on recipients of the One-Parent Family Payment.

In Chapter 3 we also examine the Back to School Clothingand Footwear scheme as well as supports for families through

the book rental scheme. Finally, we examine both Maternityand Adoptive Benefit, in conjunction with the standardisa-tion of payment rates in 2014, as well as the complex areaof Rent Supplement and the removal of Mortgage InterestSupplement (MIS) support payments for families in mortgagedifficulties and the phasing out of MIS for existing claimantsby 2017.

Chapter 4 examines payments and supports for those whoare sick, both short-term and long-term, and support paymentsfor carers. We will also show why fewer applications for disa-bility and carers payments are being approved and what youcan do to prevent your claim being rejected and support yourappeal. In 2013 there were 141,000 claims rejected (of which31,962 were claims for Illness Benefit), of which 23,715 wereappealed. We look at the Fair Deal nursing home scheme

(amended in 2013) and provide a practical understanding ofthe assessable factors. Chapter 4 also examines the numerousgrants for adaption to homes. Finally, Chapter 4 explains the


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benefits and eligibility criteria for the Medical Card and GPVisit Card, with the use of case studies. Recent reports showthere are just under two million people in receipt of either aMedical or GP Visit Card; however the Minister for Healthintends to reduce the number of Medical Card holders byreducing eligibility for the over-70s and reviewing all existingcard holders eligibility (probity), as well as having previ-ously removed certain financial eligibility criteria in 2013. Asof October 2013, 50,000 Medical Cards, including 17,000 dis-cretionary Medical Cards, have been withdrawn after review.

Chapter 5 examines the area of pension payments forwidows, widowers and surviving civil partners and also eli-gibility for the State Pension. From 2014 people will have towait until they are aged 66 to seek a State Pension paymentas the State (Transition) Pension has been removed for newapplicants aged 65 after 1 January 2014. In this chapter wewill also examine in detail and through case studies how tocalculate your State Pension, when to apply and how to plan

ahead in getting and maintaining your PRSI records.Finally, Chapter 6 examines all aspects of the tax system,

and explains in simple, jargon-free language how to calculateyour income tax, USC and increased PRSI costs with clearexamples across a number of different family status catego-ries as well as incorporating the changes to the new SinglePerson Child Carer Tax Credit (replacing the One-Parent

Family Tax Credit). It also identifi

es available tax credits thatmay be available to you to reduce your tax liability. Receiptsfrom income tax are expected to be 17.05 billion in 2014. Itis estimated that at least 800 million of tax credits could gounclaimed every year. Chapter 6 will identify all the main,and some unknown, tax credits that go unclaimed every yearthat could be better in your pocket!

Chapter 6 also examines the Local Property Tax, and

explains in detail how it is calculated, how you can pay, andhow you can possibly seek a deferral. In this chapter we alsodiscuss septic tank charges and imminent water charges in


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2015. Finally, Chapter 6 also examines Capital Gains Taxand Capital Acquisition Tax (more commonly known asInheritance Tax) as well as tax returns and the new PRSIrequirements for chargeable persons.

Know Your Rights: 2014 Social Welfare, Health and Taxationanswers a vast range of topical day-to-day questions relevantto the consumer and citizen. If you have a question that hasnot been covered in this book, please send it in and I will domy best to address it. Questions should be forwarded to:

Orpen PressLonsdale HouseAvoca AvenueBlackrockCo. DublinTel: 01 2785090Email: [email protected]

I can also be contacted through my website: www.yourrights.ie.

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Documents

Know Your Rights: 2014 Social Welfare, Health and Taxation