We filed for divorce but what about my share of the pension?
Q: After several years of trial separation, my husband and I, both in our early 50s, have decided to file for divorce. We got legal advice on matters to do with the house and assets, but it recently struck me that our pension pot is something which I have not yet considered. We have both contributed into our pension fund over the years, which we have had for around 17 to 18 years, although there were times when I was out of work or only working part-time when the children were young. I'm worried about my rights to my fair share, and whether there is any protection in place for me in terms of drawing down what I've contributed over the years.
A: For some couples, a pension can be their most lucrative financial asset, after the family home. In your case, after almost 20 years of saving, it's very prudent to consider the fair allocation of this fund going forward, despite going through what must be a very difficult time for you both.
Jerry Moriarty of the Irish Association of Pension Funds (IAPF) says that the fact that you, as a woman, have worked part-time at different times, likely leading to a lower level of contributions to the pot, tallies with what IAPF research has frequently found to be the case in many households - greater pension benefits often accrue in the male's name. However, there are structures in place to assist spouses with lesser contributions achieve a fair allocation of mutual savings.
Under the Family Law Act 1995, the Family Law (Divorce) Act 1996, and the Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010, a court has the power to treat a pension as an asset of a separating couple, and can order that a fund be divided into whatever shares it deems appropriate.
This process is known as a pension adjustment order (PAO), and requires a proportion of pension benefits to be paid to the other spouse, or paid to a dependent member of the family.
One important point to note is that whatever percentage of the pension you are allocated, for example 50pc, it will be 50pc of the pension fund to date, not 50pc of total funds to retirement age.
A PAO must be made within 12 months of the granting of a judicial divorce.
You really should get pensions advice on this, not just legal advice.
Q I noticed in Budget 2019 that the earned income tax credit had gone up by €200. I have never claimed this credit, but I think I might be entitled to it as a company director. I own 50pc of a business I run with my friend, which we set up in 2017. My salary for 2018 is €47,000. My husband also works part-time for our business and he earned €31,000 this year. We are jointly assessed for tax purposes. Are we entitled to claim this credit?
A The earned income tax credit for the self-employed has been increased by €200 from €1,150 to €1,350. It looks like you should both be entitled to the credit at the lower rate and at the higher amount from 2019 onwards, according to Eileen Devereux, who is commercial director at Taxback.com.
If you are in receipt of other PAYE income (from another company), your PAYE credit will be calculated first. If you do your own tax return manually, the tax credit needs to be claimed by ticking the box for it under the personal credits section.
And if you have not got the credit but you are entitled to it, you don't have to wait until the end of the year to sort this out as you can contact Revenue to get the credit during the year.
Q I have just returned from abroad and want to take out good health insurance cover. I am 33 years old and have a budget of around €1,200 to €1,300 for the year. I keep hearing about these so-called corporate plans. Can you provide a recommendation as to the best cover?
A Corporate plans are the best plans to consider first and this budget will give you access to some of the best schemes, according to Dermot Goode of Totalhelathcover.ie.
Corporate plans tend to be better value and have superior benefits to other health cover plans.
They are specifically designed to attract companies that pay for cover for their staff, but under the law they must be made available to anyone who asks for one.
Check out the following plans which, he says, offer excellent value cover:
Irish Life Health 4D Health 2 at €1,213 for the year.
Vhi Healthcare PMI 3613 at €1,242.
Laya Healthcare Simply Connect Plus at €1,250.
Need to know
Greater pension benefits often accrue in the male's name. However, there are structures in place to assist spouses with lesser contributions.
Need to know
If you have not got the credit but you are entitled to it, you don't have to wait until the end of the year to sort this out as you can contact Revenue to get the credit during the year.