state contributory pension

ewiz9

"To qualify for the State pension you must have started paying social insurance before reaching 56 years of age. You must have paid at least 520 full rate social insurance contributions and have a yearly average of at least 48 paid and/or credited full rate contributions from the year you started insurable employment until you reach 66 years of age. If you don't have the above then you must have a yearly average of at least 10 paid and/or credited full rate contributions from the year you started insurable employment to the end of the contribution year before you reach the age of 66."

can anyone explain what the above means ? If I work for 5 years paying PRSI and move to another country, then am i eligible for state pensions when I retire?

coylemj

520 full rate contributions is 10 years, you need this to get anything. But if you work and pay social welfare contributions in a country with which there is a bilateral agreement, you may be able to get credit for contributions made abroad.

That yearly average stuff will be changed in about 2020 when they will move to a total contributions approach and it will simply be (number of years contributions divided by 40) and that is the % of the maximum pension you will be paid but I'm fairly sure there will still be the 10 years minimum, below which you get nothing.

coylemj

FAQ (PDF download) on the new scheme here.....

http://www.welfare.ie/en/downloads/Pensions_PolicyOptionsReporton2012RateBands_Q+A.pdf

And note Q.20 ...

Q20. Will you remove the requirement to have 520 contributions paid to qualify for a contributory pension?

There are no plans to remove this requirement, as it is considered a reasonable threshold above which to require people who seek a contributory pension to have made at least 10 years paid contributions into the system, over the nearly 50 years of working age life.

Those who do not satisfy this requirement may qualify for a State Pension Non-Contributory at up to 95% of the State Pension Contributory rate (based on their share of household means).

ewiz9

coylemj wrote: »

520 full rate contributions is 10 years, you need this to get anything. But if you work and pay social welfare contributions in a country with which there is a bilateral agreement, you may be able to get credit for contributions made abroad.

That yearly average stuff will be changed in about 2020 when they will move to a total contributions approach and it will simply be (number of years contributions divided by 40) and that is the % of the maximum pension you will be paid but I'm fairly sure there will still be the 10 years minimum, below which you get nothing.

So in the new 2020 scheme, if somebody works for 10 years, they get (10/40) of the max pension. ie. around 250Euro/pm based on current calculations? Those who start working before 2020 be moved into the new scheme?

coylemj

ewiz9 wrote: »

So in the new 2020 scheme, if somebody works for 10 years, they get (10/40) of the max pension. ie. around 250Euro/pm based on current calculations?

Yes. But you can add up to 10 years of 'credits' where you sign on at your local social welfare office once a year (stating that you are unemployed and seeking work) before pension age and those 10 years can be added to your years of actual contributions.

Say you stop working at age 58 so there's going to be a few years before you can claim the pension but you don't qualify for Jobseeker's Assistance whihc is means-tested. In that case, you can sign on for credits up to the time you reach pension age.

A person who takes time out of the workforce caring for children (up to 12 years of age) or an adult who requires full-time care can claim up to 20 years of credits. But if you're combining 'signing on' credits with 'homecaring' credits, the max. is 20 years combined.

ewiz9 wrote: »

Those who start working before 2020 be moved into the new scheme?

It's when you reach pension age that matters. 2020 is the start date for the 'total contributions approach' I outlined above. But anyone applying for a pension after Sept. 1st 2012 can elect to use the TCA approach and if that gives them a higher pension (vs. the current averaging system), they will get it. See Q.11 in the FAQ at the link I posted above.

ewiz9

coylemj wrote: »

Yes. But you can add up to 10 years of 'credits' where you sign on at your local social welfare office once a year (stating that you are unemployed and seeking work) before pension age and those 10 years can be added to your years of actual contributions.

Say you stop working at age 58 so there's going to be a few years before you can claim the pension but you don't qualify for Jobseeker's Assistance whihc is means-tested. In that case, you can sign on for credits up to the time you reach pension age.

A person who takes time out of the workforce caring for children (up to 12 years of age) or an adult who requires full-time care can claim up to 20 years of credits. But if you're combining 'signing on' credits with 'homecaring' credits, the max. is 20 years combined.



It's when you reach pension age that matters. 2020 is the start date for the 'total contributions approach' I outlined above. But anyone applying for a pension after Sept. 1st 2012 can elect to use the TCA approach and if that gives them a higher pension (vs. the current averaging system), they will get it. See Q.11 in the FAQ at the link I posted above.

thanks well explained.

I was considering relocating to another country. In that case, all my current PRSI contributions (3 years) will be gone I suppose, unless that country has a bilateral agreement