Health Insurance ARFs and the Fair Deal Scheme

[Dan Murray]

Moved from the thread on the Fair Deal Scheme.

What happens with an ARF? There's a few things going on like (a) actual withdrawals from the ARF, (b) imputed distributions and (c) the residual ARF value. (a) and (b) presumably have to do with the "income" part of the financial assessment test whilst (c) presumably relates to an asset value. So my questions are:
- How precisely do (a), (b) and (c) inter-relate?
- Are there different options available and what's the smart thing to do?
- If you felt that it was likely that you might need a fair deal scheme, what factors should you consider in terms of evaluating the merits of an annuity versus an ARF?

 

[Dan Murray]

I've been trying to get to the bottom of this myself - without success alas - can anyone help me out please?

 

[Slim]

On application to FD, an ARF will be assessed at 7.5% of valuation. If there is a drawdown, say minimum 4%, this is assessed at 80% after tax, USC & prsi. Each year this can be reassessed to reflect drawdown and increased valuation, if any.

see page 59: http://revisedacts.lawreform.ie/eli/2009/act/15/revised/en/pdf?annotations=true