I will be 66 in January, so will I qualify for the State pension?

QI turn 66 in January 2022 and am totally confused as to whether I will get the State pension. At that stage I will no longer be working and while I have money in the credit union, I will largely be dependent on the pension. Do you think it will be available to all of us who turn 66 in 2021, or 2022, or will we have to wait another year?

A

The promises from the various political parties ahead of the last election would have confused anyone, says Glenn Gaughran, who is head of business development at the Independent Trustee Company

Ltd. After the election, the current Government decided to reverse a planned increase to the age at which people receive the old age pension, from 66 to 67. This had been due to come into effect in January. Instead, the Government committed to setting up a commission to consider the issue and make a recommendation to the Government by next summer, Mr Gaughran said.

For you not to receive your pension in January 2022, the Commission would need to report on time and make a recommendation to immediately increase the age to 67 or higher, he added.

The Government would then have to consider the recommendation and decide to apply that increase on or before January 2022. Based on the level of public resistance to such a move, and the general political aversion to delivering bad news, particularly with little notice, Mr Gaughran says that there is little chance of that happening within that time frame. This means you will likely receive the old age pension in January as you hope.

Q

I am a divorced woman. My ex-husband sends me €350 per week. This is not part of any legal maintenance agreement. He is not currently residing in Ireland, but he pays tax on his income in his country prior to it being sent to me and is not in receipt of any tax allowance for this money. Am I obliged to declare this income to revenue? I am in my 60s and my ex-husband is living in Canada.

A

If it is a case that they are not legally enforceable payments and are made voluntary they would be treated as a voluntary payment, according to the consumer tax manager of Taxback.com Marian Ryan. Voluntary maintenance payments are an arrangement between individuals without any legal agreement in place, she said. These payments are ignored for income tax purposes. This means you will not pay the income tax, universal social charge (USC) or pay related social insurance (PRSI) on payments received. However, Capital Acquisitions Tax (CAT) may apply to these payments, where the group thresholds for CAT are exceeded. However, Ms Ryan said that as you are in receipt of €18,200 a year (€350 by 52) you would be below the Group C threshold, so you would not have any CAT liability either.

Q

My mother has left me her house in her will. It is still in her name. She is now in a nursing home. She would be no longer able to change the will. It’s a rural property valued at €120,000. Will I have to pay inheritance tax on this property when my mother passes away?

A The inheritance tax-free threshold from parent to child, known as Group A, is currently €335,000, according to solicitor Susan Murphy of MakeMyWill.ie.

She said that provided the value of the property plus any cash assets you are due to inherit do not exceed the Group A threshold amount, you should not have to pay inheritance tax. Ms Murphy said you should note, however, that prior gifts or inheritances from a parent (since December 2001) are taken into account when calculating the taxable amount.

Q I have the VHI Public Plus Care scheme. Is it worthwhile reviewing my cover?

A This

is an entry level plan designed to cover public hospitals only and costs €489 per adult, according to health insurance expert Dermot Goode of TotalHealthCover.ie. He said that if your are happy with this type of cover for now, all other equivalent plans are in the same price range.

If possible, Mr Goode recommends that you consider upgrading your cover to a plan which covers both public and private hospitals such as the VHI One Plan 250, which costs €926 per adult a year; Laya Essential Health 300, which costs €997 per adult; or the Irish Life Health Benefit scheme, which has an annual adult cost of €1,037.