My understanding of invalidity pension is if you are working part-time which is the case with paul his invalidity pension can be reviewed at any time,If Paul has enough PRSI contributions he would be better applying for Invalidity Pension which is not means tested.
I am puting this question here on behalf of a friend of mine who I will call Paul.
Paul is getting disability allowance as he is on the austic spectrum but he is high functioning. He is planning to get some part time work soon.
His parents are still alive and he has siblings.
I know his family would have money. I think if they give him €3,000 a year it would be tax free. This €3,000 a year could be given each year over the next 10 years and be paid back when Paul gets his inheritance.
Wouldn't the income taken from the PRSA be taxed as income? And he wouldn't have access to the PRSA until he is 60. Surely a trust would be more beneficial in this instance?We looked at this question for someone in a similar position.
We explored the possibility of making a very large contribution to a PRSA since these are excluded from many means tested benefits.
Tax relief is available against earned income indefinitely and the PRSA can be drawn down in stages to provide capital payments which can be safely consumed.
Marc Westlake
Chartered Certified and European Financial Planner
www.globalwealth.ie
This would be a loan and as such subject to a notional interest calculation by the revenue which would become the gift, although never likely to exceed the 3000 per year. Its always worth availing of this threshold if the total likely inheritance will exceed CAT thresholdsHe can get a €3,000 tax free GIFT from each parent annually (and also from each sibling should they wish to do so). However if it will be paid back when "Paul" gets his inheritance then it's not a gift!
The first 50K is not taken into account for the disability allowance means test. After 50K it's €1 per €1000 on the next 10K. Then €2 per €1000 on the next 10K - anything over 70K is €4 per €1000. Citizens information and social welfare have all the rules in full.
Is he renting or paying a mortgage etc., at the moment? The 77K over the savings limit would be very quickly eaten up by paying down all or part of a mortgage. If he's renting then buying a house/apartment would use up all or most the inheritance.
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