State pension rules harm couples who save together Ó Cuív says

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Couples who put their savings into joint accounts are being penalised under state pension regulations Galway TD Eamon Ó Cúiv has said.

Speaking in the Dáil this week, Deputy Ó Cúiv said that when there is a couple with one person as a primary earner, they lose out if they put their money into joint accounts.

When there is a couple in receipt of a contributory state pension and a dependent adult allowance, the allowance can be decreased if the joint account rises to high, but not if the account is only in the name of the primary earner, he said.

“A situation has arisen for couples who have worked a lifetime, where one was the primary earner and the other stayed at home to rear families and perhaps care for loved ones, and who were in receipt of a contributory pension and a dependent adult allowance, or an increase for a qualified adult, IQA, as it is called in the jargon.”

“Let us take two couples who have saved money. Perhaps they have received a lump sum at the end of an employment or a legacy.”

“The first couple puts this money into the primary earner’s bank account, while the other couple puts it into joint bank accounts. In that situation, if the savings of a lifetime go over €150,000, the dependent adult allowance is decreased.”

“If a couple puts the money into a single bank account, which nobody would recommend, they receive the whole amount,” Eamon Ó Cuív said.

To claim an Increase for a Qualified Adult (IQA) you must be getting a social welfare personal payment.

Minister Heather Humphreys said that the state pension increase for an adult dependent is based on a means test of the spouse of partner you are claiming on behalf of.

Where “savings, property or other assets” are jointly held by a couple, then the means test assumes that half of the total amount is that of the person being assessed.

“It is a matter for each couple to decide how their finances are arranged and the Department has no role in this.”

“The current means-testing arrangements are based on the actual means of the spouse or partner at any given time.”

Deputy Ó Cuív said that where one partner in a couple is the main earner, it is always recommended that they would share joint accounts.

“We then say that is fine because the couple has followed our advice. However, we are now cutting their payments for doing what we advised them to do.”