Insure Your Income? Why Bother?

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Recently the government announced plans to phase in a new Statutory Sick Pay Scheme with employers being told to guarantee a minimum number of paid sick days annually from 2022.  It is planned that employers will cover up to 10 days sick leave by 2025.

A welcomed improvement for employees, but what happens if you are seriously ill, or out of work long term?

Have you considered how you will cover your day-to-day living expenses, mortgage and other loans if you are out of work for a year or longer?

Rather than having to use up all your savings or borrow funds, the best solution is to have an Income Protection Plan in place (a.k.a. salary protection).

 

What is Income Protection?

Income Protection pays you a monthly income in the event you cannot work due to accident, injury or illness.

  • The cost is based on your age, health, and job description.
  • Premiums are eligible for tax relief at your marginal rate of tax or at 12.5% if paid via your company.
  • Income Protection can be set up on a Personal basis, or can be set up as an Executive Plan paid by your company.

We are to delighted to offer a Discount of 10% up until the 31st July 2021.

Never one to let a good opportunity go to waste !

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Never one to let a good opportunity go to waste – Fiona used her time in Lockdown to get the head down and study 🤓📚
Well done to her for obtaining the SIA designation (Specialist Investment Adviser) through Institute of Bankers (IOB) today, and getting the most for her clients in investment, asset and wealth management strategies. 🎉🎉👏👏
You can find out more about this course here: https://bit.ly/3xQ4aii
A big congratulations from Grainne and Deirdre ! 😁
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4 Must-know Guidelines for Co-habiting Couples

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In the census of 2016 there were over 152,302 co-habiting couples living in Ireland. Of those approx. 60% have children.  The family unit is changing and evolving.  It may be 2021 but most cohabitants still have very little rights under the law.

 

What are your rights as a Co Habiting Couple?

 

No matter how long you are with your partner you can still be treated as ‘strangers’ in the event of one of you passing away.  In this unfortunate event:

 

1. You won’t be entitled to Widows Pension

 

2. You will not be eligible for social welfare benefits that may be available to married people. If renting, how will you afford to continue paying rent now that you are reduced to one income and not eligible for social welfare benefits that may be available to married people?

 

3. If the lease isn’t in both your names, your tenancy may be unsecure

 

4. For Inheritance tax purposes, the threshold is very low for unmarried couples – you can only inherit €16,250 without paying tax (anything over this suffers tax at 33%!).

 

There is a relief called Dwelling House Exemption that you may be entitled to claim for.  You may be exempt from paying Inheritance tax (CAT) if the following conditions are met:

 

  • The house was the only and main home of the person who died.

 

  • You lived in the house as your main home for 3 years before the person’s death.

 

  • You do not own, have an interest or a share in any other house, including the one you acquired as part of the same inheritance.

 

  • The house is your main home for 6 years after you receive the inheritance. This does not apply if you are over 65.

 

The Good News

 

You can start a dialogue with you partner! It may not be very romantic, but as the old adage goes ‘Only two things in life are certain.  Death and Taxes’!

 

  • Have that conversation! Discuss with your partner what you want to happen should either of you pass away.  This is especially important where you may have been previously married and/or have children from a previous relationship.

 

  • Make a Will! As above, you may want to ensure your partner has a home for the remainder of their life.  You should have it stipulated in your Will what is to happen with any property you own.  This will protect your surviving partner.  Otherwise if the property is left to their next of kin, they may well decide to sell the property and leave your partner looking for alternative accommodation.  This has resulted in many people becoming homeless.  If your partner dies Intestate (without having left a Will) you will be particularly vulnerable.

 

  • Take out Life Cover – to protect your partner and children and to pay any inheritance tax that may arise – consult with an experienced Financial Planner or CERTIFIED FINANCIAL PLANNER™.

 

Our Top Tip!

 

There is a way of setting up your life insurance in such a way that no tax liability is payable regardless of whether you are married or not.

 

Each person simply takes out life insurance on the other i.e. on a ‘Life of Another’ basis and pays the premium from their own bank account and income, the benefit would be paid out to the remaining partner of the policy without any inheritance tax owing saving most people in this situation a considerable amount.  There are other solutions that are available.

 

Getting married has significant advantages legally and for tax purposes but if this isn’t an option you can still plan for your future and safeguard your rights etc by seeking legal and professional financial advice now.

 

Bottom Line

 

Do not put off having this conversation!

 

If you think someone you know may benefit from information on co-habiting, please consider sharing this article or reaching out to grainne@sunrisefinancialplanning.ie to talk about your unique circumstances