Will niece be assessed for third level grant on her own income?

My mother unfortunately passed away in January, and my niece had been staying with her during her first year at college in Dublin.

My niece is 18, and this year can apply for the Susi grant in her own name, (as her parents were just over the income limit last year), and is working over the summer to pay for next year’s fees etc.

Last year she contributed to some of the household bills, but this year she will be on her own in the house, and we’re wondering can she claim the cost of gas/electricity/internet/house insurance/maintenance etc as her living expenses/rent when applying to Susi, as she will be paying these basically instead of rent, or do we have draw up something “rent wise” for it to be accepted by Susi? If we do, do myself and my siblings have to declare this income on a tax return, so that everything is above board?

Any help or guidance in this matter, would be gratefully appreciated.

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Ms B.D., email

The Susi grant system supporting students on lower incomes in third level education isn’t an area I’ve covered a lot so I went looking at what it involves and who is eligible. The first thing that jarred with me was your understanding that your niece could apply for a Susi grant in her own name (and on her own income) because she was now 18.

As someone whose own children went through college in recent years, I didn’t think it was that black and white.

A quick check with the Susi eligibility guide throws up the information that, if you are under the age of 23, you are considered dependent, regardless. Not only that, but you must have been 23 on January 1st of the year of your first point of entry into further or higher education to be considered independent.

As your niece is only 18 now and is in second year, I don’t think she will qualify as an independent applicant for Susi. This means that the means test in the Susi system will once again take into account her parents’ income, not just her own earnings in assessing her application for a grant.

It is important to remember here that it is not just her parents’ income that is included but also hers, where relevant. However, there is a dispensation for work out of college term. This includes earnings during June, July and August up to a maximum of €4,500.

So your niece’s effort to work over the summer to pay for next year’s college fees and other costs will not rebound on her – at least up to that earnings limit.

There are a few exceptions to this blanket requirement to include parents’ income but none seems to apply here. It would include things like she being an orphan or being irreconcilably estranged from her parents. And of course, she’d need to provide proof of that.

Means test

I don’t see anything in the Susi process about allowing any offsetting of expenses such as utility bills – or even rent – against income.

The means test seems to be pretty clear. First, the test for the coming academic year will be based on income during the 2020 tax year. It includes gross income from all sources. That means family income before any income tax or PRSI is deducted. It also includes payments such as pensions – whether private or state pensions and any income she or her parents get from savings or investments.

Inheritances would also be included in the calculation.

There is a very specific list of welfare and other payments that are disregarded in the means test. These include child benefit, the family income supplement and the carer’s allowance. It also includes any personal injury compensation. The full list is available from Susi.

When all is said and done, the income figure needs to be below €39,875 where the family has four or fewer dependent children to receive a full maintenance grant. This gross income figures rises to €43,810 where there are 5-7 dependent children and to €47,575 for families with eight or more children.

In this case, I don’t think drawing up a rental agreement is going to make any difference. In fact, the idea that your niece is living rent free might, in itself, be considered income-in-kind, falling under the “other sources of income” category though I cannot say for sure how this would be applied.

And yes, any rental document would likely leave the people involved – you and your siblings – facing potential tax bills on that rent.

I also do not see any way that she can claim against the cost of utilities or internet access within the Susi grant system.

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