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Allowance for the purpose of assessing disposable income

The allowances that may be given against a person’s income so as to determine disposable income are set out in the Regulations and are (as of September 2013) as follows:-

Nature of Allowance                 Maximum Amount per Annum
Spouse/partner                                  €3,500
Each dependant                        €1,600
Child care per child                    €6,000
Accommodation cost                €8,000
Income tax                                Full amount
Social insurance                        Full amount
USC                                         Full amount
PRD                                         Full amount
Each ex-gratia payment             €1,040

Accommodation cost

  1. This allowance relates only to the cost of accommodation incurred by an applicant in respect of the property in which he/she normally resides.
  2. An applicant is allowed the full amount paid for the full year in respect of accommodation costs, subject to a maximum allowance of €8,000.
  3. Where spouses are living in separate households and an applicant pays the cost of accommodation for a spouse/partner, the allowance for the applicant may be increased to include this cost, subject to the maximum of the accommodation allowance.
  4. A mortgage is considered to include any top-up loans that are secured on the property. 
     

Rent Supplement, Mortgage Interest Supplement, and Rent Allowance are treated as part of the applicant’s gross income. Therefore, where the applicant is receiving Rent Supplement/Mortgage Interest Supplement/Rent Allowance, the full amount of rent / mortgage payments should be allowed subject to the maximum accommodation allowance of €8,000.

For example:
Applicant’s rent is €600 per month

Applicant receives €400 per month Rent Supplement.

Accommodation allowance is €600x12 = €7200

The rent supplement of €400x12= €4800 is treated as part of the applicant’s gross income.

Spousal allowance

An allowance of €3,500 is granted where an applicant is married and is living with their spouse, or is in a civil partnership and living with their civil partner, or is a “qualified co-habitant” within the meaning of Section 172(5) of the Civil Partnership and Certain Rights of Co-habitants Act 2010 (ie living together as a couple for more than two years if they have children together, or more than five years if they have no children. The other qualified co-habitant is referred to in this Handbook as the applicant’s “partner”).

Where the applicant is living apart from his/her spouse/civil partner/former partner, payment of maintenance in respect of a spouse/civil partner/former partner entitles an applicant to an allowance in respect of the amount paid, up to a maximum of the spouse allowance.

Where the applicant has a common interest in the proceedings with his/her spouse/civil partner, and his/her spouse’s (civil partner’s) income is being taken into account (i.e. joint assessment), a spousal allowance should be granted.

Dependant allowance

A dependant allowance is granted in the following circumstances.

Child dependants living with the applicant

An applicant must insert the ages of all dependent children/stepchildren on the application form.  In the case of any child (ren) above the age of 18 whom the applicant claims is dependent, details should be obtained as to whether they are in full time education or are dependent for some other reason e.g. a person with special needs. A dependant allowance of €1,600 is granted in respect of each such child.

“Dependants” for the purposes of the income assessment include the applicant’s children or step children who are under 18 years of age; children above that age who are pursuing full time courses of education.      

Dependants need to be permanently resident with the applicant. However, in this regard, a child who is temporarily away at boarding school or who is a college student and temporarily living in university halls of residence or other accommodation, and who returns during the summer, is regarded as permanently resident with the applicant.

Child dependants not living with the applicant, but for whom the applicant is paying maintenance:

Payment of maintenance in respect of a dependant entitles an applicant to an allowance in respect of the amount of maintenance paid, up to a maximum of the dependant allowance, i.e. €1,600 per child.

Such dependants include:-

  • the applicant’s children or step-children who are under eighteen years of age; and
  • children above that age who are pursuing a full-time course of education.

Other dependants resident with the applicant

This applies to other persons permanently residing with the applicant and who do not have available to them independent means of support. For example, where an applicant is in receipt of carer’s allowance, the person whom the applicant is caring for may be such a person. It is up to the law centre to decide whether this is the case, having regard as to whether the person concerned has their own income available to them.

The dependant allowance of €1,600 should be granted in respect of each dependant.

Income tax

An applicant is allowed the full amount of tax payable for the full year. Details can be obtained from the wage slip or Revenue Commissioners notice of assessment.

PRSI

An applicant is allowed the full amount of PRSI payable for the full year. Details can be obtained from the wage slip or Revenue Commissioners notice of assessment. 

Universal social charge

An applicant is allowed the full amount USC payable for the full year. Details can be obtained from the wage slip or Revenue Commissioners notice of assessment.

Child care

An allowance of €6,000 per child may be claimed by an applicant who is employed in respect of payments for childcare, where such payments are necessary to allow the applicant to pursue employment.

This allowance is only claimable by an applicant who has declared income from employment or a business, and whom also has claimed a dependant (including maintenance payments) allowance in respect of the children concerned. Furthermore it is only claimable in respect of childcare while the applicant is actually working or travelling to and from work. It is not claimable in respect of payments for childcare while the parent is engaging in recreational or other activities which do not relate to his/her employment/business.

Where the cost of child care is borne by both parents, an applicant will receive an allowance only in respect of the amount paid directly by the applicant, subject to a limit as set out in the examples.

Examples:

Applicant and other parent share the cost equally and applicant pays €4,000. The amount allowed is €3,000, i.e., the half of the maximum figure, namely the proportion of the amount actually paid as a proportion of the maximum allowance.

Similarly, if an applicant pays 25% of the cost, the maximum allowance is €1,500, i.e 25% of the maximum allowance.

Disposable income

The disposable income and contribution form should be used to calculate the disposable income/capital and to determine the amount of the contribution payable.  Disposable income must be €18,000 or less for a person to qualify for legal services. Disposable income is arrived at by deducting the allowances from the gross income, as set out on the form. If the disposable income is:-

  • €18,000 or less , the applicant is – subject to a capital assessment where applicable - financially eligible for legal services; and
  • if it exceeds €18,000, the applicant is ineligible.