Pensions and Retirement

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Pensions & retirement


Below is some introductory information on state pensions. Full information and information on your particular circumstances and situation should be sought from the Department of Social Protection. You can also contact Citizens Information for confidential advice and information.

Advice and information on private pension schemes is available from the Pensions Authority.

The Contributory State pension is a social insurance payment made when you reach 66 years. It is based on your Pay Related Social Insurance (PRSI) record – more information on PRSI is available here. This pension is not means tested.

Your personal rate is not affected by other income you may have, such as private pension etc. The pension is taxable but you are unlikely to pay tax if it is your only income.

What are the Contributory State pension rates?

The rates of payment are available here. 

What are the qualifying criteria for the Contributory State pension?

To qualify an individual must:

  • Be aged 66 or over. (This will rise to 67 in 2021 and 68 in 2028)
  • Have started paying PRSI contributions before reaching the age of 56 years.
  • Have made at least 520 full rate PRSI contributions.
  • Have a yearly average of 10 for a minimum pension and 48 for the maximum pension paid.

What are the PRSI contribution types for self-employed?

PRSI for the self-employed was introduced in 1988. All self-employed people aged between 16 years and 66 with earnings more than a specified amount (currently €5,000 per annum) must pay PRSI. The class of PRSI contribution paid by self-employed people is Class S.

If your income falls below the €5,000 limit and you are under 66 years, you may apply to make voluntary contributions. Payment of voluntary contributions can help maintain or improve your contributory pension entitlements. From April 2015, to qualify to make a voluntary contribution
you must:

  • Have at least 520 weeks PRSI contributions paid under compulsory insurance in either employment or self-employment.
  • Make a voluntary contribution within 12 months of the end of the year during which you have last paid compulsory insurance. If you were previously self-employed the voluntary contribution is €500.

How do I calculate my yearly average contributions?

The calculation is made by counting the total number of contribution years, beginning with the year you first started paying PRSI up to and including the last full contribution year before you reach the age of 66 – this is called your Total Contribution Years. Then you count your entire full rate paid contributions and credits over the same period – this is called your Contributions and Credits.

Your yearly average is calculated as follow by dividing your contribution and credits by total contribution years.

How can I find out the number of PRSI contributions I have made?

To request a copy of your PRSI contribution record ccontact: Central Records Department, Department of Social Protection, McCarter’s Road, Ardarvan, Buncrana, Co. Donegal or Locall 1890 690 690

I have a gap in my PRSI record as I was caring for a child or for an ill person, will this affect my Contributory State pension entitlement?

From the 6th April 1994, any period spent as a homemaker caring for either a child under 12 or an ill person may be disregarded when calculating your “yearly average”. A maximum of 20 years can be disregarded.

You do not need to apply if you are getting Child Benefit (and are providing the child with fulltime care), Carer’s Allowance, Carer’s Benefit or Carer’s Support Grant. The Department will treat any claim for Child Benefit, Carer’s Allowance, Carer’s Benefit or Carer’s Support Grant as an application to become a homemaker and will note this on your insurance record automatically.

If you are not getting any of these payments, but you have cared for a child under the age of 12 or an ill or disabled person aged 12 or over at any time from 6 April 1994, you should apply to become a homemaker. Registration should happen before the end of the contribution year after the year you became a homemaker.

An application may be backdated if there is a delay in submitting the claim. For further information, contact: Homemaker’s Scheme Section, Department of Social Protection, McCarter’s Road, Buncrana, Donegal or Locall 1890 690 690.

I have a gap in my PRSI record, however I was working in partnership with my spouse on the farm enterprise but we have not claimed this when making our annual take returns, can I retrospectively make PRSI contributions in my own right?

Possibly. The Department of Social Protection and the Revenue Commissioners use the following criteria to determine if a partnership exists:

  • There is a written partnership agreement (there is no legal requirement to have a written agreement).
  • Each partner writes cheques on the business accounts in his/her own right.
  • There is a joint business account.
  • It is apparent to those doing business with the partnership that a partnership exists.
  • Business accounts/activities are in joint names of the partners.
  • Each partner makes a significant contribution to the running of the business.
  • The business is owned jointly by the partnership, the farm does not have to be jointly owned, although it is a positive factor where it is jointly owned.
  • The profits and losses of the partnership are shared by each partner. They do not have to be shared on a 50:50 basis; it is up to the partnership to decide, but clearly each must have an income of €5,000 at least.

You should be able to meet some of these criteria if you are claiming to have been in a partnership with your spouse. It is very important to get professional legal and tax advice before you make any formal arrangements.

To get more information contact the Scope Section, Department of Social Protection, Gandon House, Amiens Street, Dublin 1 or call (01) 673 2585. If you are happy that you satisfy the criteria you can retrospectively apply to have your business partnership recognised. A Social Welfare Inspector will interview you and your spouse, examine relevant documents and report your case to the Scope Section.

I assist in the farm enterprise with my spouse/civil partner, but am not an employee or in a farm business partnership, so I do not have any PRSI contributions in my own right. Are there any steps I can take to qualify to make PRSI contributions?

Possibly. Certain spouses and civil partners of people who are self-employed are able to access social insurance by paying PRSI, to build up entitlement to social insurance benefits as a self-employed worker. Prior to 2014 these categories of spouses or civil partners were excluded from social insurance.

To qualify they must demonstrate:

  • That she/he performs similar tasks as their self-employed spouse/civil partner; and
  • That her/his income from all sources exceeds the minimum self-employed insurability threshold of €5,000. The income from her/his contribution to the farm must be shown as trading income or a share of the profits in the pay and file return made under Revenue’s self-assessment system of tax collection.

Can my spouse, civil partner or cohabitant get a Contributory State pension based on my record?

No, a person can only qualify for a Contributory State pension based on their own PRSI record.
However, if your spouse or civil partner does not qualify for a contributory pension in their own right, or qualifies for a lower rate, you can apply for an Increase for Qualified Adult on your pension. This increase is subject to a means test.

You will not get an increase if your spouse, civil partner or cohabitant:

  • Has gross weekly earnings of more than €310.
  • Is getting a higher rate social welfare payment in their own right (except Disablement pension,
    Supplementary Welfare Allowance, Guardians Payment or Child Benefit).

If your spouse, civil partner or cohabitant has gross weekly means of €100 or less you will receive the full increase for them. If they have gross weekly earnings of between €100 and €300 you will get a reduced rate.

When and how do I apply for my Contributory State pension?

You should apply three months in advance of reaching the age of 66. Application forms are available from your local social welfare office, post office or Citizens Information Centre. If you need assistance call the Department of Social Protection on Locall 1890 500 000. The completed application form should be returned to Social Welfare Services, College Road, Sligo.

If you do not claim within 6 months of becoming eligible, you could lose some payment.


Download an IFA Guide to the Contributory State Pension 

If you have any questions or want independent advice on pensions, your pensions entitlements or applying for a pension contact your local Citizen Information Office

The Non-Contributory State pension is a means-tested payment for people aged over 66 who do not qualify for a Contributory State pension or who only qualify for a reduced contributory pension based on their PRSI record. This pension is taxable but you are unlikely to pay tax if it is your only income.

What are the Non-Contributory State pension rates?

Find the current rates for the Non-Contributory State Pension

What are the qualifying criteria for the Non-Contributory State pension?

To qualify an individual must:

  • Be aged 66 or over (rising to 67 in 2021 and 68 in 2028)
  • Pass a means test
  • Meet the habitual residence condition (you are residing in Ireland and have a proven close link to the state).

What is assessed in the means tests?

Yours means is assessed under the following headings:

Cash income

  • Any cash income you have is assessed in the means test, this includes income from a pension from another country.
  • Your net income from farming or leasing is fully assessed with no disregards. The net income is worked out by deducting expenses incurred from the gross income. If you own land that is not productively used or leased this is assessed on its capital value.
  • Earnings from employment up to €200 per week is not assessed.

Value of capital

Savings, investments, cash in hand and any property you own (excluding your home) is assessed as capital. All your capital from different sources is added together and a formula is used to find your weekly means from capital.

The formula for assessing means from capital is as follows:

First €20,000 – nil
Next €10,000 – €1 per €1,000
Next €10,000 – €2 per €1,000
Balance – €4 per €1,000

Income from property personally used

The value of the house you live in is not taken into account in the means test. However, any income (rent) you are getting maybe taken into account. There is an exception – if renting the room means that you are not living alone then your income from rent is not taken into account.

Your total means under the headings are added together to see what level of pension, if any, you can get. If you are one half of a couple (married couple, civil partners or a cohabiting couple of the same or opposite sex) then your means are taken to be half of the total means of you and your spouse, civil partner or cohabitant.

If you were getting Farm Assist and the different means test that applies to the non-contributory pension results in you getting a lower level of payment, you keep your entitlement to the higher amount for Farm Assist.

You must always contact the Department of Social Protection if there are any changes to your circumstances, as a change could mean an increase or decrease in payment. By contacting the Department, you will either get an increase faster or avoid repaying overpayments.

When and how do I apply for my Non-Contributory State pension?

You should apply three months in advance of reaching the age of 66. Application forms are available from your local social welfare office, post office or Citizens Information Centre. If you need assistance call the Department of Social Protection on Locall 1890 500 000. The completed application form should be returned to Social Welfare Services, College Road, Sligo.

If you do not claim within 6 months of becoming eligible, you could lose some payment.


 

Download an IFA Guide to the Non-Contributory State Pension 

If you have any questions or want independent advice on pensions, your pensions entitlements or applying for a pension contact your local Citizen Information Office

Making PRSI contributions as an ‘assisting spouse’

Until 2014 spouses and civil partners of farmers who assisted in the farm enterprise but were not employees of the farm or in a farm partnership could not pay PRSI contributions and, therefore, could not build up PRSI entitlements.

From 2014, spouses and civil partners of farmers who assist their spouse/civil partner in the farm enterprise, but who are not employees of the farm or in a farm business partnership, can now qualify to make PRSI payments as a self-employed worker (PRSI Class S). Qualification to make these contributions applies only from 2014 onwards, and it will not be possible to make retrospective contributions.

This change will benefit those persons who were previously excluded from the Social Insurance system as a self-employed worker and who can, between now and turning 66, make sufficient contributions to bring them up to a minimum of 10 years of contributions, thereby qualifying for a contributory pension.

From 2014 onwards, in order to make PRSI contributions, the individual who assists their spouse/ civil partner on the farm must:

  • Demonstrate that she/he performs similar tasks as their self-employed spouse/civil partner; and
  • Demonstrate that his/her income from all sources exceeds the minimum self-employed insurability threshold of €5,000.

The income from his/her contribution to the farm must be shown as trading income or a share of the profits in the pay and file return made under Revenue’s self-assessment system of tax collection.

Where the person now qualifies, they are liable for PRSI at a rate of 4%, subject to a minimum payment of €500.

Read more on the Department of Social Protection Website.

Homemaker Scheme

The Homemaker’s Scheme makes it easier for a homemaker to qualify for the State Pension (Contributory).

A homemaker, for the purposes of the Homemaker’s Scheme (which was introduced from 6 April 1994), is a man or woman who provides full-time care for a child under age 12 or an ill or disabled person aged 12 or over.

Under the Homemaker’s Scheme any years that you spent as a homemaker (since 6 April 1994) are ignored or disregarded when working out your yearly average contributions for a State Pension (Contributory). To be eligible, you must:

  • Permanently live in the State (except in cases where provisions under EU or posted worker regulations apply)
  • Be aged under 66
  • Have started insurable employment or self-employment on or after the age of 16 and before the age of 56
  • Not work full-time, however, you can work and earn less than €38 gross per week
  • Care full-time for a child under 12 or an ill or disabled person

A homemaking year is a year in which you are out of the workforce for the full tax year (only a full year can be disregarded). Up to a maximum of 20 homemaking years can be disregarded for State Pension (Contributory) purposes.

Homemaker’s credits can be awarded for part of a year at the start of the homemaking period, from the date you become a homemaker up to the end of the tax year. Likewise, homemaker’s credits can also be awarded for part of a year when the homemaking period ends, from the start of the tax year up to the date you stop homemaking.

The Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension is a social insurance payment made to widows, widowers and surviving civil partners. It is based on the social insurance (PRSI) record of either the claimant or their late spouse or civil partner.

The pension is not means tested, so your rate of payment is not affected by other income you may have such as an occupational pension, earnings from employment, etc.

You qualify for Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension if you:

  • are widowed or a surviving civil partner or
  • are divorced from your late spouse (as recognised in this State) and have not remarried or
  • have had your civil partnership with your late civil partner dissolved and have not registered in a new civil partnership and
  • you are not cohabiting as a couple and
  • you satisfy certain social insurance contribution conditions or
  • your late spouse or civil partner got a certain rate State Pension (Transition) or a certain rate State Pension (Contributory) which included an increase for you as a Qualified Adult or would have included this increase but for the fact that you were getting a State Pension (Non-Contributory), a Blind Pension or Carer’s Allowance in your own right.

To qualify for Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension either you or your late spouse or civil partner must have:

a) 260 paid social insurance contributions paid to the date of death of the spouse/civil partner or before pension age (currently, age 66), whichever is earlier; and,

b) have a yearly average of either 39 paid or credited social insurance contributions in either the 3 or 5 years before death of the spouse/civil partner or before they reached pension age or at least 24 paid or credited social insurance contributions from the year of first entry into social insurance until either the year of death of the spouse/civil partner or the year they reached pension age, whichever is earlier.

In addition to your pension, you may qualify for some increases in pension payment based on your circumstances.

Increase for a Qualified Child (IQC)

If you have a child that normally lives with you that is aged under 18 or up to 22 in full time education who is being supported by you, you may qualify for IQC. You can no longer claim an IQC if your spouse, civil partner or cohabitant has an income of over €400 per week. You will get a half rate IQC if your spouse, civil partner or cohabitant earns between €310 and €400 a week. This only applies to a claim made after 6th July 2012. The full IQC rate is €29.80 and the half IQC rate is €14.90.

Living Alone Increase

If you are aged 66 or over and living alone, you are entitled to an additional €9 per week. To qualify for the increase, you must live completely alone. However, there are some exceptions if you:

  • Live in an extension of a family member’s home, for example, in a granny flat, but can show that you have facilities to cook and eat alone. You must also have your own living/dining and sleeping accommodation.
  • Are aged or infirm and have a friend or relative to stay for security reasons at night-time only.
    The friend or relative must not contribute to the household financially.
  • Live alone during the day but stay with relatives or friends at night, or if you live alone during the week but have a relative to stay at the weekend.
  • Live alone

Aged 80 Allowance

You automatically get paid an extra allowance of €10 per week when you reach 80 years of age.

This increase is not paid to qualified adults.

Fuel Allowance

The Fuel Allowance pays you an increase of €22.50 per week to help with the cost of heating your home during the winter months. There is only one Fuel Allowance payment per household.

It is a means-tested payment, which is linked to the maximum rate of the Contributory State pension. You are eligible for a Fuel Allowance if your assessable income limit is for a:

  • Single person under 80 – €333.30 (€100 plus €233.30 i.e. max pension)
  • Couple (where the qualified adult is under 66) – €488.80 (€100 plus €233.30 plus extra €155.50)
  • Couple (where the qualified adult is 66 or over) is €542.30 (€100 plus €233.30 plus Extra €209)

If you are aged over 80, you get €32.50 per week.

Household Benefits Package

The package is available to everyone over 70 and to some people under 70 in certain circumstances. There are two allowances:

  • Electricity/Gas allowance of €35 per month
  • Free Television Licence allowance.

For full information on pension and other benefits see the Citizens Information Website. 

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