Medical card taken away due to notional HSE interest on savings

My husband and I are in our 90s and 80s respectively and live on his public service pension since he retired from public services in the early 1990s. Over the years, we always put by small amounts into An Post savings products at a time when certs and bonds earned up to 40 per cent over five years. They earn between 0.5 per cent and 1 per cent per annum for the last number of years.

Five years ago, our medical card was removed from us after a Revenue audit calculated our An Post savings were earning about 17 per cent per annum at a time when it was 1 per cent or less, thereby pushing our supposed income over the qualifying limit for a medical card.

It only shows there is no advantage to saving and more would be thought of us if we had spent every penny. How is this fair?

Ms M.G., email

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Well, it’s not fair and it seems to me that it should not have happened. The good news is that you should be able to get your medical cards back.

If there’s one thing that older people worry about, it’s medical bills. Everyone over 70 may have access to a GP visiting card that covers the cost of visiting your doctor. But it does not cover any other medical costs.

The GP visiting card also does not cover the cost of medicines and that alone can leave families facing bills of up to €114 every month even with the support of the Drug Payment Scheme. That figure will drop to €100 from next month but €100 a month to people living on a modest pension is a significant sum.

Means testing

The medical card used to be an automatic entitlement to everyone over the age of 70 but that was ended in the wake of the financial crisis when the then government was scrambling around to save money.

There's nothing inherently wrong with a means test as the purpose of free medical care is to ensure that those who cannot afford it do not lose out on access to healthcare. However, it is a blunt instrument and can be particularly harsh on those who have little income but have managed to build up savings through careful husbandry down the years.

The means test for the over-70s is more generous than the one applied to other people – and the Minister for Health, Stephen Donnelly, says the vast majority of people aged 70 years and over continue to hold medical cards under the gross income arrangements – but it is still finite.

At present, the gross weekly income limit for a single person over the age of 70 is €550. The weekly income limit for a couple is €1,050. This includes cash income and an assessment of your savings or any investments you might have.

Critically, in relation to your cash income, it is gross income that counts – ie before tax. So if you are paying tax, you are assessed as having this income even if the only person who gets to see or use it is the Revenue Commissioners.

When it comes to savings and investments, however, things are a little more nuanced.

In relation to property, no matter how many properties you own, you will not be seen as getting an income from them unless they are being rented out. There is no notional income. This is particular to the over-70s means test. A means test for anyone under that age would apply a notional income to property other than your family home.

The end result is that people over the age of 70 with holiday homes will not have anything to worry about on the medical card means test, unless they earn a real income from it.

Savings

Then we come to savings. There’s an irony that people are constantly encouraged to be prudent and make sure they have set money aside for a rainy day and yet that can come back to bite them later on.

There is an allowance on savings. A single person over the age of 70 can have as much as €36,000 in savings without it affecting their medical card means test. For couples, the limit is doubled, to €72,000, and that is available to any couple as long as one of them is over the age of 70.

You are obviously well beyond that – both in age and, from what you tell me, in the amount of savings you have salted away over the years. And this is where the notional rate of interest comes in. The HSE – and it is the HSE who manages all this, by the way: Revenue focus on tax but they do not have anything to do with medical card assessments and means tests – will adopt the default position of applying a notional rate of income to your savings.

This is set quarterly, I gather, and is their assessment of what return, interest or yield your savings should give you. However, the figure you give in your letter would suggest the HSE’s notional rate seems to be a world removed from the actual rates savings are securing in the market.

The notional rate may be higher than current market rates but I’d be surprised if it was 17 per cent even back five years ago. The HSE seems coy about publishing the rate but successive ministers have disclosed it at various times in response to parliamentary questions.

It apparently went from about 3 per cent in 2014 to 1.64 per cent a year later and, in 2017, just after you lost access to your cards, then minister Simon Harris said it had fallen to 0.68 per cent.

Actual interest rate

But, whatever it is, is immaterial. Why? Because there is a very important alternate approach to measuring the income your savings are giving you.

If the notional rate is not representative of what you are getting, the HSE is prepared to apply the actual rate of interest you receive. You do need to provide a certificate of interest paid on the savings in the last full calendar year ahead of your medical card assessment, but that's easily available from any financial institution.

And, where the money is tied up for a fixed terms, applicants have the choice of asking the HSE to take account only of interest earned on the date the investment matures.

I’m not sure how clearly the HSE presents this information on any medical card application form or review assessment form they give you. They do provide the information clearly online but that is not where a lot of older people feel able to access information.

One thing to be aware of that, as with cash income, it is gross interest that counts, not what you are left with after DIRT is deducted at 33 per cent.

So, assuming the actual interest earned on your An Post savings – as against the notional rate – does not bring you over the €1,050 weekly income ceiling when added to your cash income, you should either apply again for medical cards for you and your husband or appeal the original decision.

I’d be inclined to start with the latter: the HSE will tell you if too much time has elapsed – which I imagine it will have – and you have to reapply from scratch. The advantage of an appeal, if successful, is that eligibility might be backdated. But,as I say, I suspect you’ll be on a new application at this stage.

An appeal can be sent to The National Appeals Office, HSE, An Clochar, Ballyshannon Health Campus, College Street, Ballyshannon, Co Donegal, or by email to nationalappeals@hse.ie

A new application for an over-70s medical card can be made on a form that should be available from your local GP.

It’s a pity you were not told this five years ago when your cards were taken. It would have saved you a lot of worry and, presumably, money spent on medical bills in the meantime.

There’s a message here for both the HSE and GP practices on helping to ensure that older patients are not deprived of support to which they are fully entitled.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice.