The Sunday Times - Money Questions 22/11/09

Posted by Jill Kerby on November 22 2009 @ 14:18

BK writes from Co Kerry:

I am 51 and have worked in the HSE for the past 15 years and pay into the HSE pension fund. Prior to this I worked for eight years in the private sector where my pension contributions were invested and left in the Irish Life’s Consensus Fund. As well as my HSE contributions, for the past five years I have also been investing in an AVC with Irish Life. Is it possible to transfer both these Irish Life pension funds into my HSE pension now and use them to buy back years of service? I am aware that buying back service is very expensive. Irish Life said it was not possible, but I read somewhere that since the Pension Act it was possible.

According to the Pensions Board it is possible to secure transfer values of your occupational pension fund from your previous, private sector employer and your existing AVC and to then use this value towards the purchase of years of service in your HSE pension. But you must check first with the HSE pension administrator about the rules that pertain to purchasing years of service. This can be a very complicated area, but one that pension consultants, in my experience, is worth considering when compared to the cost of funding AVCs. If the transfer value you are quoted appears much lower than you were expecting, it could be because the one you are working off is not very current, or it could be due to the way the value has been calculated by the scheme actuary. You might also want to consult an independent pension advisor if you have any doubts. If you haven’t already done so, I suggest you open a file, and keep all correspondence and documents in good order so that all parties are fully up-to-date with exactly what terms and conditions apply to both your pension funds and the purchase of the extra service years.

FG writes from Dublin:

I was very surprised to read your recent reply in regarding a medical card for a UK pensioner. My understanding is that receipt of a UK state pension automatically entitles a pensioner living in the Irish state to an Irish medical card regardless of his/her total income as long as it includes no Irish pension and the pensioner is not working in the Irish state. This is due to EU regulations that prevent an individual person in one EU state being worse off when moving to another EU state.  Please research the issue fully and confirm the above.

I have confirmed with the HSE that all medical cards issued by them are means-tested, regardless of the origin of the applicant. However, if you are declined a card, said the spokesman, you may still be granted a card at the discretion of the HSE, depending on your particular circumstances. Since the beginning of this year there has been a big change in the system of allocating medical cards but another reader who also contacted me thinking that means testing did not apply in his case supplied me with a very out-of-date document he received from his Citizen’s Information Centre dated September 2000. If you have any further doubts about your own case, contact the HSE at Callsave 1850 24 1850
or directly at your local health office.

YM writes from Dublin:

I am unemployed living on savings, would I have a tax free allowance that I could claim against DIRT payments as that is my only income?

The only people who are not subject to deposit income retention tax are those who are permanently incapacitated and the over 65s whose income falls below the tax exempt income threshold, which is currently €20,000 for a single person and €40,000. Despite your low income you will still be subject to DIRT and while this is no consolation, even children – who are too young to work – will find that any growth in their savings is subject to the 25% tax.

MNM writes from Dublin:

I'd be most grateful if you could answer the following question, based on the following information: two people own three properties in joint names. Property one is the principal residence of person A. Property two is the principal residence of person B. Property three is used as a holiday home by both people, and NPPR tax has been paid on that holiday property. Is there a liability for NPPR tax on property one or two, with regard to the person not using it as a principal residence?

The Non Principal Private Residence charge of €200 applies to property that you own that is not your “sole or main” residence. You and your friend, person B, each partly own three properties – but the two that are each considered your ‘sole’ residences are exempt and you are only obliged to pay the €200 on the holiday property that you jointly own. It’s a good thing that you paid your tax on the holiday property; the Act provides that if a charge is not paid within a month after the last date for payment, a late payment fee will apply for every month or part of month that the €200 charge remains unpaid. For 2009, this means that the late payment fee will apply to all payments made after 31 October 2009.

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