Social Welfare Clearance in Estates
25 January 2024
An important part of the clearance steps in an estate is ensuring that one obtains on file a letter from the Department of Social Protection confirming that the Department has no claim on an estate. This blog is a helpful refresher for solicitors on this point or a good entry point for junior solicitors or junior probate administrative staff working on probate.
The Initial Steps
At the start of any probate case it is important to write to the Department of Social Protection informing the Department of the death of the deceased. The address to use is as follows:-
Pension Services Office, Department of Social Welfare, Estates Unit, College Road, Sligo
After setting out in the subject line of a letter the name and address of the deceased, the date of death and the PPS no, the body of the letter should state:-
In the vast majority of cases one will receive a letter relatively quickly from the Department indicating that the deceased was in receipt of a contributory State pension and so there is no claim in the estate and that is the end of the matter.
This step is quite obvious but can be missed from time to time and it is important to have this step baked into your probate procedures.
One should generally keep a list of your probates on a register or create reports through your document management procedures noting whether or not clearance has been obtained and that that this step has been completed and closed off.
The legislative basis of these arrangements is s. 339 of the Social Welfare Consolidation Act 2005 which can be reviewed by practitioners online.
If it is the case that the deceased was in receipt of a non-contributory pension payment, then, it is vital that the practitioner has a reminder in place to send the SA.2 to the Department of Social Protection at the same time as documents are sent to the probate office.
The practice thereafter can vary. In some cases after having reviewed the assets of the deceased the Department will then issue a letter of clearance and find that the level of assets on death are consistent with the level of assets disclosed to the Department at the time when social welfare was obtained.
In other cases, there is sufficient reason for the Department to warrant an investigation.
The investigations by the Department tend to be extensive. The information sought tends to be all bank statements of all accounts of the deceased from the date that the pension was first applied for until the date of death, together with statements of values of assets during such period. One tends to recieve a list of informaiton requirements from the Department to follow.
One finds that in some cases financial institutions only have information going back a number of years and from experience, the Department of Social Protection appear to accept all good faith efforts to meet the information requests of the Department.
The Department will then issue their assessment and the amount sought to be recouped can be significant in some instances.
However, decisions of the Department can be the subject of appeal or representation and we have had some success in reversing or minimising decisions.
In one particular case, the deceased was the owner of a statutory freehold of certain properties in London. The full value of the assets were adopted by the Department. However, the assets in question were subject to long leases which were part of a statutory scheme in the UK where the leaseholders had automatic rights to call for further 100-year leases. Where the leases are renewed the freehold owner only has the right to a relatively small statutory compensation payment and the Department accepted that this was the true value of the property interest rather than full freehold value.
Similarly, representations can be made concerning shareholdings which may increase in size or value over time due to conversions or share splits. Just because holdings increase over time, shouldn’t necessarily mean that the claimant under-declared their assets at the time when social welfare was obtained. This may be a further basis of challenge.
The impact of getting this step wrong is significant. S. 339(3) of the 2005 Act makes it clear that personal liability for amounts owing is imposed on personal representatives who distribute assets without holding back sums to meet a social welfare claim. No client will thank their solicitor for missing this important step in managing a probate file, particularly where it can be avoided with a few simple steps.
The need to obtain social welfare clearance is not something that is highlighted in red in legal textbooks of probate practice or dwelt on significantly during probate training. However, if left as an afterthought, this deceptively simple task on a file can have serious consequences for a personal representative.
Hopefully, this is of assistance and if you have any probate, will drafting of tax queries please do not hesitate to contact me on firstname.lastname@example.org. Colm Kelly Solicitor