CNER at 63 and supplementary pension

[buzybee]

I am in my 50s and am in the post 2004 pre 2013 pension scheme. This is coordinated with social welfare.

I would like to retire on a cost neutral basis at 63. My retirement age is 65. I know I would get supplementary pension at 65 provided I can prove I have claimed all benefits to which I am entitled.

Does this mean that I have to sign on at Social Welfare for tax credits when I retire at 63, and possibly claim jobseekers from my prsi stamps for 9 months? This feels uncomfortable as I am not looking for a job.

Or do I wait until I am 65 and then sign on at social welfare for prsi credits (bridging the gap from 63 to 65 by paying for prsi contributions).

I am concerned that if I fail to qualify for supplementary pension I could be left on a very small pension until possiblt 67 or 68. If I knew this now, I could put plans or extra avcs in place.

 

[Early Riser]

When you retire at 63 you do not have to claim Jobseeker's Benefit - although you get PRSI credits while signed on. Otherwise you can maintain PRSI through private sector work (including part time) or voluntary contributions. Or you may already have 40 years worth of contributions/credits (for a full State Pension) by that stage?

One way or another, when you apply for a Supplementary Pension at 65 (assuming you are not in insurable employment at that stage) you will be obliged to claim any contributory Social Welfare payment for which you are eligible. If you apply for JB (or currently the new over-65 Pension) and are deemed by Social Welfare to be ineligible then you should be eligible to receive your Supplementary Pension. If you are granted JB (or over-65 Pension) then you will not get the Supplementary while this is in payment (or at most you will get a small Supplementary top-up, in the event that the Social Welfare payment should be less than the amount of Supplementary that is applicable in your case).

So, at 65 you should be eligible for either a Supplemenatry Pension or a Social Welfare payment (provided you are not in insurable employment). However, unless you already have 40 years worth of PRSI by 63 you should do something to maintain your record between then and 65.

 

[buzybee]

Thank you for this. I have worked fulltime in the private sector between leaving school and taking up the public sector position so I should have enough credits. I do not intend working between 63 and 65.

Would the civil service continue to pay out the supplementary pension amount when I am pension age i.e. 67 or 68 or would I have to engage with social welfare to receive this? Would there be two payments when I am 67 or 68? One from the civil service and one from social welfare? How would this work for cost neutral retirement? Social welfare may not know to apply the cost neutral to the social welfare portion of my pension.

I think that I would go to social welfare at 65? to 'sign on' for credits. I would just pay for prsi credits from 63 to 65. If they offer me the 9 months contributory jobseekers, then I will explain my situation. This offer will be rescinded when I am not looking for work. At least then, I can prove I have looked for any payments to which I am entitled. If i signed on with social welfare at 63, then i would have to get another letter from them at 65 for the supplementary pension.

 

[Early Riser]

Would the civil service continue to pay out the supplementary pension amount when I am pension age i.e. 67 or 68 or would I have to engage with social welfare to receive this?

Currently the State Pension is payable from 66. If this remains the case when you retire then your Supplementary would end then - that is so even if it is being paid to you between 65 and 66 (rather that the current over-65 payment from Social Welfare). If the State Pension age was to rise to 68 in the meantime then the Supplementary would remain payable until then (unless there was some other SW payment for which you were then eligible in the meantime). If, for some reason, you don't qualify for the over-65 payment, etc, from SW at 65 then you should be eligible for the Supplementary immediately until the State Pension becomes payable.

I think that I would go to social welfare at 65? to 'sign on' for credits. I would just pay for prsi credits from 63 to 65. If they offer me the 9 months contributory jobseekers, then I will explain my situation. This offer will be rescinded when I am not looking for work. At least then, I can prove I have looked for any payments to which I am entitled. If i signed on with social welfare at 63, then i would have to get another letter from them at 65 for the supplementary pension.

You need to separate out what you do at age 63 and at age 65. What you do when you retire at 63 is of no relevance as far as your current employer is concerned, ie, whether or not you apply for Social Welfare at that stage is up to you, and is not related to payment of the Supplementary at 65.

The relevant condition is that you cannot receive a Supplementary Pension when you are receiving, or eligible to receive, a Social Welfare Benefit. Therefore, when you apply for the Supplementary Pension at 65 you will be required to apply then for any relevant SW payment - currently the over-65 payment (and you would probably qualify for it under current eligibility rules). Your employer will have no interest in whether you applied for JB at 63, or not.

Look at it another way. If you retired at 64 years and 3 months you could (at your own discretion) apply to SW for JB. If approved it would be payable for 9 months until 65. If you then apply for Supplementary you would then be obliged by your employer to apply to Social Welfare for any relevant benefit, ie, the over-65 payment. Your employer would not be interested in what you did for the previous 9 months, as it is not a condition of the Supplementary.

Would there be two payments when I am 67 or 68? One from the civil service and one from social welfare? How would this work for cost neutral retirement? Social welfare may not know to apply the cost neutral to the social welfare portion of my pension.

Any payments from Social Welfare and from your old employer are separate. If you are awarded the Supplementary this comes from your old employer and the payment is combined with your normal Occupational Pension (one "cheque"/payslip). Once you go on a SW payment (eg, State Pension) your Supplementary ends and you just get your normal Occupational Pension amount ftom your employer. You get the State Pension (or over 65 payment) from the Dept of SW.

 

[buzybee]

Thank you very much for this. It is annoying having two payments long term as I would need to see that tax was paid correctly. With one payment the tax would just be deducted automatically.

 

[Early Riser]

If and when you are getting the Supplementary there will be one cheque and the tax will all be deducted from this by your payment office. If you are getting a Social Welfare payment you just let Revenue know and they will code it into your main pension for tax purposes, ie, all the tax will be deducted from your Occupational Pension. Once this is done it is seamless. Social Welfare automatically inform Revenue about State Pension payments for this purpose - I assume the same applies for the over-65 payment.