Q&A: I am just approaching my 80th birthday and I have no income, pension or otherwise. I worked all of my life in private and self-employment.

Foolishly, I never made any provision for my present position. I have no pension, private or public. I never applied for a State pension because I never made any contributions and, at this stage, I have no wish to be explaining my life to strangers.

However, my wife is in receipt of the old age pension, and our three children who live and work abroad contribute to our upkeep. I would reckon on an annual basis this would come to approximately €10,000. This therefore is the sum of our total combined income.

Do I have to declare this income for tax purposes and, if I do, is it liable for tax and would it have an impact on my wife’s old age pension?.

Mr J McG, Limerick

There are a number of issues here but first among them is your need to overcome your reluctance to approach the Department of Social Protection. It is there precisely to ensure that people do not have to live in penury – or be reliant on the goodwill of family to survive.

There are two more particularly relevant reasons to get in touch with the authorities – your wife could well qualify for a qualified adult allowance on your behalf and, ultimately, there is always the danger that she could predecease you and you would be in a right financial pickle.

What is not clear from your letter is whether your wife is on a contributory or non-contributory State pension. It will be the former if she had paid employment for a period of her life during which she made PRSI payments, or stamps.

If that is the case, the pension will range from €154.20 to €230.30 per week. In addition, she will be entitled to claim a qualified adult allowance of between €103.20 to €206.30 for you.

If she is on a non-contributory State pension, it will be means tested and will range up to a maximum of €219 per week (€229 if she is over 80 herself). In addition, she can claim a qualified adult allowance for you of up to €144.70 on your account.

Importantly, the level of this is dependent on your means. From what you say, you should be eligible for close to the maximum on this allowance. However, you will need to apply (if your wife has not already done so) and have a means test carried out on your income and assets.

It’s never a particularly pleasant experience, but then you can’t expect the State to be giving away hard-earned tax revenue (or borrowings) without being sure that someone is genuinely in need, according to the criteria.

The important thing is that if you and your wife qualify for the maximum weekly pension and allowance, you will be talking about an income of €19,432 per annum, which is certainly worth pursuing.

Of course, in the case of a means test, there may be an effort to take into account the financial support being provided by your children. Having said that, if it is not secure income – and your children have already paid tax in full on it – I cannot see why it should raise a tax issue for you at this stage. As I have mentioned previously, there is nothing to stop each of your children “gifting” you a maximum of €3,000 a year without it being liable to tax.

Dealing with credit card debt on a limited income

I am trying to figure out whether I will be in a position to avail of the new personal insolvency programme. I am a pensioner with very limited income but have managed to build up a not inconsiderable credit card debt.

There is no way I can meet the payments on this out of my income and the worry of it is causing a great deal of stress.

Can you clarify whether I might be able to get some relief through this new personal insolvency thing?

Mr G M, Dublin

There’s an awful lot we have yet to find out about the new personal insolvency regime. The Government has only published the proposed legislation and it would not be unusual for the detail of this to change as it passes through the Oireachtas.

In any case, it is not likely to become law until towards the end of the year, if then, so you really need to be acting on your debt before then, especially when, as you say, it is the cause of considerable stress.

You should approach the card issuer and see if you can reach some arrangement to pay down at least part of the debt and, ideally, to stop interest piling up. That is likely to mean you losing your card but, in the circumstances, that’s probably not a bad thing.

In relation to the sort of relief that might be available under the new regime, there is provision for what is called a debt relief notice.

This will allow people to write off unsecured debt – credit card or utility bills for example – of up to €20,000.

The qualifying criteria are quite strict. To avail of this path, you will need to have assets of less than €400. That includes property, so homeowners would be ineligible. Also, you would need to have net disposable income of €60 or less a month.

If this would not apply, you are looking at a debt settlement arrangement. This puts in place a repayment schedule that you can afford and at the end of five years, any outstanding debt is written off.

It will need the support of 65 per cent of creditors but, in your case, that would appear to be the card issuer, who presumably would prefer a structured arrangement to the present unsatisfactory position.

This column is a reader service and is not intended to replace professional advice. Please send your questions to QA, c/o Dominic Coyle, The Irish Times, 24-28 Tara Street, Dublin 2, or to dcoyle@irishtimes.com. No personal correspondence will be entered into.