What are the new conditionsto make a PRSI contribution?From 2014 onwards, the individual whoassists their spouse/ civil partner on the farmmust:• Demonstrate that she/he performs similartasks as their self-employed spouse/civilpartner; and

• Demonstrate that his/her income from allsources exceeds the minimum self-employed insurability threshold of€5,000. The income from his/hercontribution to the farm must be shownas trading income or a share of the profitsin the pay and file return made underRevenue’s self-assessment system of taxcollection.

What PRSI payment will be required?Where the person now qualifies, they areliable for PRSI at a rate of 4%, subject to aminimum payment of €500.

From when does this change apply?Individuals who now qualify to make a PRSIpayment are liable from 2014 onwards. For aself-employed person (i.e. with no externalPAYE source of income), the PRSI liability willbe paid, along with preliminary tax, in October2014.

The IFA Farm Business and Farm Family & Social Affairs committees have compiled thisinformation leaflet to assist farm families. Answers in this leaflet have been approved by theDepartment of Social Protection and the HSE. The leaflet does not claim to represent a legalinterpretation of the relevant regulations.

Your Guide to Recent Changes in the PRSI System

What is the benefit of making PRSI payments?Payment of PRSI allows people to build upentitlements to social insurance benefits, suchas the state contributory pension, maternitybenefit and widow/widower contributorypension.

What has changed in the PRSI system?From 2014, spouses and civil partners offarmers who assist their spouse/civil partnerin the farm enterprise, but who are notemployees of the farm or in a farm businesspartnership, can now qualify to make PRSIpayments as a self-employed worker (PRSIClass S).

Prior to 2014, this group of ‘assistingspouses’ were excluded from social insuranceas a self-employed worker and could notmake PRSI payments. Qualification to makethese contributions applies only from 2014onwards, and it will not be possible to makeretrospective contributions.

What is required to qualify for a contributory pension? To qualify for a contributory pension uponreaching pension age, a person must have aminimum of 520 full PRSI contributions.Individuals must have started payingcontributions before reaching 56 years.

Who may benefit from this change?This change will benefit those persons whowere previously excluded from the SocialInsurance system as a self-employed workerand who can, between now and turning 66,make sufficient contributions to bring them upto a minimum of 10 years of contributions,thereby qualifying for a contributory pension.For example, it may be of benefit to a personaged 60, who has previously made at least 5years of full PRSI contributions and will nowbe able to make a further 5 years ofcontributions, thus qualifying for a pension bythe time they reach 66.

It may also be of benefit to someone who hasalready sufficient contributions made to qualifyfor a contributory pension, but who may nowincrease their number of contributions, thusincreasing the weekly pension rate theyreceive upon turning 66.

Where can I get more information on these changes?Further information is available fromInformation Services Department of SocialProtection, Social Welfare Services, CollegeRoad, Sligo, LoCall 189066224

Other Important PRSI InformationHas there been any change to the PRSI rules for partnerships? No. The PRSI rules for farm or other businesspartnerships remain unchanged. Where two ormore family members operate the farmbusiness as a partnership and share the

profits, they may each make individual PRSIcontributions, and build up their pensionentitlements, provided each has an income ofat least €5,000.

People are still entitled to apply to the Scopesection, Department of Social Protection, OisinHouse, 212-213 Pearse Street, Dublin 2 forrecognition of a farm partnershipretrospectively.

VoluntaryContributionsMy income is below the minimum insurable threshold of €5,000. Can I keep up my PRSI payments?Possibly. Voluntary Contributions are PRSIcontributions you can opt to pay if you arebetween the age of 16 and 66 and are nolonger covered by compulsory PRSI (e.g.income below €5,000 if self-employed).Payment of Voluntary Contributions can helpmaintain or improve your contributory pensionentitlements.

How do I qualify to make a Voluntary PRSI Contribution?From April 2014, to qualify to make aVoluntary Contribution, you must have atleast 468 weeks PRSI paid under compulsoryinsurance in either employment or self-employment (520 weeks from 6 April 2015).You must apply to make your voluntarycontribution within 12 months of the end ofthe year during which you last paidcompulsory insurance.

What amount is the VoluntaryContribution?If you have previously been self-employed, thevoluntary contribution is €500.

Where can I get more information on Voluntary Contributions?Further information is available from the Voluntary Contributions Section, Department of Social Protection, Cork Road, Waterford. Tel: (051) 356 000.

I am on Farm Assist, can I make PRSI contributions?Yes. Since 1st January 2007, farmers inreceipt of Farm Assist must pay PRSI. If yourincome is above the insurable threshold of€5,000, your contribution will be 4% ofincome, subject to a minimum of €500. If it isbelow this, you may be able to pay VoluntaryContributions.

Where can I get more information on mySocial Insurance contribution record?You can confirm how many contributions youhave made by contacting the PRSI Records, Department of Social Protection, McCarter’s Road, Ardarvan, Buncrana, Co.Donegal or Locall 1890 690 690

You will need to provide as much of thefollowing information as possible: PPSnumber, name, address, date of birth, birthsurname, mother’s birth surname, Pre-1979insurance number and telephone number.

Maura Canning, Chair IFA Farm Family & Social Affairs Committee

Tom Doyle,Chair IFA Farm Business Committee

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What is the Fair Deal Scheme?The Nursing Homes Support Scheme (‘FairDeal Scheme’) is a financial support schemefor people who need long-term nursing homecare. Under the scheme, you make acontribution towards the cost of your care andthe State will pay the balance. This applieswhether the approved nursing home is public,private or voluntary.

Is the Fair Deal Scheme compulsory?No. There is no obligation for an individual toapply for the Fair Deal Scheme. The individualand family can choose to pay for nursinghome or other care directly. The Fair DealScheme provides an option for families toaccess nursing home care and to share thecost of care with the State.

How is the person’s contribution to care assessed?Once an application is made, the HSEundertakes both a financial and a care needsassessment. The financial assessment looksat your income and assets in order to work outwhat your contribution to care (co-payment)will be. The HSE will then pay the balance ofyour cost of care. For example, if the cost ofyour care was €1,000 and your weeklycontribution was €300, the HSE will pay theweekly balance of €700.

How is my co-payment for the Fair DealScheme calculated?An individual’s co-payment is calculated from:• 80% of annual income (e.g. pension, SFPpayment, rental income etc.); and

• 7.5% of the value of assets per annum,(e.g. savings, investments, the principalprivate residence (home), farm and othersmall business assets). Assets thathave been transferred for less than 5years prior to application for thescheme are included in the financialassessment. (Similarly, any assets thatare transferred at the time or subsequentto the date of application are alsocounted.)

Are any of my assets not included in the Financial Assessment?The first €36,000 of any assets owned by theindividual is disregarded (or €72,000 for acouple, where one member of the couple isentering care).

How are a couple’s means calculated?In the case of couples, each individual’sassessed income and assets will beconsidered as half of the couple’s combinedincome and assets.

Your Guide to the Fair Deal Scheme

What is the ‘3 year limit’ on the principal private residence (home)?In the case of the person’s home, themaximum annual contribution that can beapplied to this asset is based on 7.5% of thevalue of the residence for the first three yearsof care (i.e. a maximum of 22.5% of the valueof the home, regardless of the length of stayor cost of care).

How are other assets treated? The 7.5% contribution on assets per annum isimplemented as follows:• Where assets are liquid (e.g. savings,investments), the 7.5% annual charge ispayable at the time of receiving care.

• Where your assets include land andproperty in the State, and you choose notto pay at the time of receiving care, the7.5% contribution based on such assetsmay be deferred and subsequentlycollected from your estate. This is anoptional Nursing Home Loan element ofthe scheme. Applicants can choose topay this contribution at the time ofreceiving care, resulting in no collectionfrom the estate.

When does the ‘3 year limit’ apply for farmor other small business assets?In certain circumstances the ‘3-year limit’ (orcap of 22.5% of chargeable asset value), isapplied to the farm or other small businessassets. It applies in the followingcircumstances:• Where the person has suffered a suddenillness or disability, which causes them torequire long-term residential care;

• Where the person or their partner wasactively engaged in the dailymanagement of the farm up until the timeof the sudden illness or disability; and

• Where a family successor certifies that heor she will continue the management ofthe farm or relevant business.

I transferred my farm six years ago – willthis be counted as part of my means?No. All assets transferred for 5 years or moreare excluded from the assessment of means.

I transferred my farm three years ago –will this be counted as part of my means?Yes. If you make an application for the FairDeal Scheme, because your farm has beentransferred during the previous 5 years fromthe date of application, it will be included aspart of your means in the overall financialassessment. It will continue to be assessed aspart of your means for as long as you remainin care.

However, you/your family have the option ofpaying your own nursing home/other carecosts for two years and applying for thescheme when the 5 years limit for transfer ofassets has expired. The farm you havetransferred will no longer be considered aspart of your means.

Will I end up paying more than the cost of my care due to having assets?No. The total amount that you will contributeunder the scheme will depend on the length oftime that you need nursing home care and thecost of your assessed contribution. Persons inreceipt of financial support under the schemewill not be required to pay more than the costof care in respect of his or her long termresidential care services.

Where can I get further information?Further information is available through theHSE at http://www.hse.ie/nhss/ . Thisprovides the contact details and telephonenumbers of the Nursing Homes Support Officefor your area. Alternatively you can telephonethe HSE infoline at 1850 24 1850.

THE IRISH FARMERS’ ASSOCIATIONIrish Farm Centre, Bluebell, Dublin 12Tel: (01) 4500266 Fax: (01) 4500421

www.ifa.ie

IFA position on the treatment of productive assetsIFA strongly supports and encourages lifetime transfers of family farms.

However, the potentially high liability on non-residential assets under the Fair Deal Scheme iscreating uncertainty and anxiety that the viability of the family farm business will beundermined or lost while meeting the costs of care.

IFA is continuing to look for a cap on the maximum % charge that can be applied to non-residential, productive assets, in all circumstances. This would allow farm families to makethe most appropriate decisions in meeting the costs of care.

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