Know Your Rights - February 2012
Question A - I am a bit confused by the new Household Charge. Who has to pay it?
Answer
In general if you own a residential property in Ireland, you must pay the
Household Charge. People on social welfare payments must pay the charge
unless they qualify for one of the specific exemptions or waivers listed
below. For private rented accommodation, the landlord pays the charge, not
the tenant.
Properties exempt from the Household Charge include those:
• Owned by government departments or the Health Service Executive (HSE) or
• Owned by local authorities or voluntary housing bodies (including
dwellings not yet fully bought from a local authority under the shared
ownership scheme) or
• In a discretionary trust or owned by an approved charity or
• Which are part of the trading stock of a business and have not been sold
or been the source of any income since construction or
• Which are liable for commercial rates and
• Mobile homes.
People who do not have to pay the charge If you have moved out of the
property due to a long-term mental or physical infirmity you do not have to
pay – for example, if you are in a nursing home or moved in with relatives
because of your need for care. (However, if you were living in the property
on 1 January this year, you must pay the charge for 2012)
If you were entitled to
Mortgage Interest Supplement on 1 January 2012, you qualify for a
waiver. People living in certain unfinished housing estates also qualify for
waivers for 2012 and 2013. Details of qualifying estates are on
www.householdcharge.ie.
You must register the property in order to claim a waiver.
Question B - I don’t really understand how social welfare payments are taxed. Can you explain?
Answer
If you have a social welfare payment and another source of income, you
may have to pay tax on your combined income. Some social welfare payments
are not taxable, but most long-term payments, such as old age pensions or
widowed people’s pensions are. Illness Benefit and Invalidity Pension are
also taxable.
Your taxable social welfare payment and your other income are added together. You are taxed on the total amount. There is no mechanism for taxing your social welfare pension at source (before it is paid to you). Your other income determines how tax due is paid.
For example, you are getting a State Pension (Contributory) and an occupational pension. Your occupational pension is taxed through the PAYE system in the same way as a wage or salary. This means that you get your tax credits in the normal way.
In order to tax your social welfare pension, your annual tax credits are reduced by the tax liability on your social welfare pension. You then effectively pay tax on both the pensions, but it is collected from the occupational pension. For higher incomes, the standard rate cut-off point will also be reduced. The technical term for this is coding-in of credits. The same arrangement applies if you have income from a job as well as a social welfare pension.
If your social welfare pension was not coded in, you would have to pay tax as a self-employed person and in a lump sum by 31 October each year.
If your
other source of income is not taxed on the PAYE system, for example, you
have investment income or you have an occupational pension from abroad, then
you are classed as a self-employed person and your tax is payable annually
by self-assessment, due by 31 October each year.
Question C - I get Rent Supplement for my wife and myself and I hear that it is to be reduced. Can you tell me by how much?
Answer
From 1 January 2012 couples must now pay a minimum of €35 per week
towards their rent. The new minimum contribution by single tenants
is now €30 (an increase of €6 per week).
A couple over 65 with an income equal to or less than the State Pension (Contributory) for their situation will contribute €35 towards their rent. A couple who both have State Pensions (Contributory) and no other income will also contribute €35 towards their rent.
Rent limits were reduced on 1 January 2012 for new claimants. The new limits will apply to existing claimants when their claims are reviewed or if they move to new accommodation.
The maximum amount of Rent Supplement varies according to the area in which you live. You can find out the limits for your area from the Department of Social Protection representative in your local health centre, from your local Citizens Information Centre or on www.citizensinformation.ie
Note that income from working as a home help for the HSE (Health Service Executive) will now be taken into account in the means test for Rent Supplement.
Question D - I get a Carer’s Allowance for one of my children. My husband is working and we get FIS (Family Income Supplement). I heard that our FIS might be reduced. Can you explain why?
Answer
It was announced in Budget 2012 that income from carer’s payments (Carer’s
Benefit and Carer’s Allowance) will be included as means when calculating
the amount of Family Income Supplement that you get. The change applies from
January 2012 for new applicants and at your yearly renewal for all others.
However, this is to be brought in over 3 years:
• In 2012 one-third (1/3) of any family income (to you or to your spouse,
civil partner or cohabitant) from a carer’s payment will be assessed
• In 2013 two-thirds (2/3) of any income from a carer’s payment will be
assessed
• In 2014 income from carer’s payments will be fully assessed
For example, if you have been getting a Carer’s Allowance of €204 a week, €68 will now be taken into account as means against your FIS when your FIS is renewed.
In addition, income from working as a home help for the HSE (Health
Service Executive) will be assessed for all new FIS claims from January 2012
and on renewal for other claims.
Further information is available from
CARLOW CITIZENS INFORMATION SERVICE
St Joseph’s Road
Carlow,
which provides a free and confidential service to the public
Open Monday – Friday 10am – 12.30pm & 2pm – 5pm
FREEPHONE 1800 747 748 or telephone 059 9138750 or
www.carlowcitizensinfo.ie
Citizens Information is also available online at www.citizensinformation.ie and from the Citizens Information Phone Service, Lo-Call 1890 777 121
Previous Know Your Rights Segments:
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
March 2011