Post 95 public sector early retirement with an ARF.

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bstop

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If a post 95 public sector worker takes early retirement at age 60 and uses their AVCs to start an ARF would the following occur ?

The ARF drawdowns are subject to S class Prsi and are considered as self employment.

Would the public sector retiree then be refused supplementary pension on the grounds that they are in employment and paying Prsi ?
 
Would ARF drawdowns subject to Class S PRSI preclude a person from claiming Jobseekers Benefit (because employed?) If not, I very much doubt that they would be regarded as "insurable employment" in regard to the Supplementary Pension.
 
They can preclude a person from claiming over 65s benefit.
They might also preclude a person from claiming Jobseekers Benefit if they do not meet the criteria for subsidiary employment.
 
The declaration form to be signed by the applicant for the Supplementary (from the HSE) makes no mention of ARF, or any pension income. It is a declaration of having been "unemployed since...xxxxx.. and not engaging in any sort of paid employment". There is also a declartion in relation to Social Welfare claims, to be accompanied by a confirmation from the DEASP.
There is no mention of ARF, or any pension income, in any of the explanatory information - only paid employment / insurable employment (sometimes also self-employment).

ARF is pension income. It is not work or employment.
 
bstop said:
ARFs are Prsi S and DSP state that this is self employment.
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Class S PRSI is described as "self-employed income". I think it was originally designed to capture someone like a one-man plumbing operation but over the years it has been extended to things like rental income, ARF income, and investment income. These are very much not employment categories. So the term "self-employed income" is increasingly a misnomer. Even DSP say that you pay on Class S PRSI on certain "unearned" income. If income is "unearned" then it is by definition not from employment.

So just because you are paying Class S PRSI does not mean that you are in employment for the purposes of a supplementary pension. So I see zero risk that ARF income would interfere with supplementary pension rights.
 
NoRegretsCoyote said:
So just because you are paying Class S PRSI does not mean that you are in employment for the purposes of a supplementary pension. So I see zero risk that ARF income would interfere with supplementary pension rights.
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People are currently being refused the 65s benefit because they are being classed as in employment as a result of having an ARF. So I would not be too confident of that.
 
bstop said:
People are currently being refused the 65s benefit because they are being classed as in employment as a result of having an ARF.
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But that's a payment from DSP.

Unless I'm mistaken supplementary pension is paid by peoplepoint or whoever from the overall public service pension envelope.

It's a totally separate budget line and administration.
 
A person is required to sign an application form to obtain supplementary pension and declare on this form that they are currently not engaged in any sort of paid employment. As an Irish Government Department is stating that ARF income is paid employment then any person with an ARF who signs this form is probably making a false declaration.
 
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bstop said:
A person is required to sign an application form to obtain supplementary pension and declare on this form that they are currently not engaged in any sort of paid employment. If any Irish Government Department is stating that ARF income is paid employment then any person with an ARF who signs this form is probably making a false declaration.
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No. It is not. They are not in paid employment, whether Social Welfare is interpreting their Class S in that way or not.
 
bstop said:
If any Irish Government Department is stating that ARF income is paid employment ....
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What do you mean "if"?

You have categorically stated that a Government Dept. IS considering ARF income as paid employment?
bstop said:
People are currently being refused the 65s benefit because they are being classed as in employment as a result of having an ARF.
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@bstop

The criteria for receipt of:
  1. Supplementary public service pension
  2. Over-65s benefit
Have different legal bases, are set independently of each other, are administered by different people from separate budget lines.

There is no risk that drawdowns from an ARF can in any universe be classified as earnings from employment, no matter what PRSI class they are covered by.
 
bstop said:
A person is required to sign an application form to obtain supplementary pension and declare on this form that they are currently not engaged in any sort of paid employment. If any Irish Government Department is stating that ARF income is paid employment then any person with an ARF who signs this form is probably making a false declaration.
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Hi all I have an Arf a number of years(since 60).Reached 65 yrs this year applied for Supplementary pension.Was told I do not qualify as I am “Self employed”paying class S insurance.Base year to qualify was 63years on reaching 65.Is it true if I took my Arf at 64 or 65 my base assessment years would be 62 and 63 and I would qualify.If that is correct and you meet all rest criteria is this not unfair to all Arf holders who took out Arfs at 63 or before.
 
Michol3 said:
Was told I do not qualify as I am “Self employed”paying class S insurance.
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Might you be currently drawing down €625/month (€7.5k/year) or more from your ARF? My very limited, and open to correction, understanding is that any monthly ARF drawdown will generate Class S PRSI stamps which would qualify for Over 65's Payment but that when you cross the €625/month (€7.5k/year) threshold (when 65) such is viewed as self-employment would exclude you from the 65's Payment. It shouldn't matter how much you drew down in the governing year (year you turn 63) as long as it generated the required number of stamps. I believe (based on what I've read on AAM) that monthly ARF drawdowns, of any amount, will generate 52 PRSI S stamps in a given year.

My thinking was that if I keep my drawdown below that threshold just prior to and during the year I am 65 then I would get the Over 65's Payment if meeting the other criteria.
 
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michaelm said:
Might you be drawing down €625/month (€7.5k/year)
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Might that be €5,000 pa?

"Zurich were recently told by Dept. of Social Protection that you will only accumulate PRSI if withdrawals are in excess of €5,000 per annum.

A large percentage of ARF withdrawals are less than €5,000.

Which in many cases will cause these retirees to have a smaller pensions (or indeed none if he/she had low levels of contributions) than they would otherwise have had if they withdrew sufficient amounts from their ARF (over €5,000) to qualify for 52 PRSI credits.

We sought clarity on this issue from the Minister for Social Protection, Heather Humphreys T.D.

Minister Humphreys got us confirmation that:

“Any income of more than €5,000 a year will incur the Class S charge. It is not necessary to have the same source for the income – for example a person could have ARF income of €3,000 and income from rents of €2,000 and would therefore be liable for the Class S charge. The minimum annual Class S contribution is €500.”
ppsfinancial.ie

ARF Withdrawals and your PRSI Record - PPS Financial Planning

Back in November 2018 Deputy Michael McGrath received clarification from the Minister for Employment Affairs and Social Protection (Regina Doherty) as to whether PRSI paid from ARF withdrawals are reckonable for the purposes of the State Pension. Regina advised “Distributions from ARFs fall...
ppsfinancial.ie ppsfinancial.ie
 
@bstop
So, for clarity, am I right to think that if your are drawing down more than €625/month when applying for the 65s benefit you will be refused?
 
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