Voluntary PRSI contributions in early retirement

B

BBR

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Can anyone clarify if and why voluntary PRSI contributions are necessary after taking cost neutral or incentivised early retirement (eg. for about 10 years). I understand that the rate of this is 6.5% of previous taxable years salary, a sizeable sum on a much reduced income. Advice very welcome.
 
They are not necessary. It is an entirely voluntary scheme.Only useful if you will not have enough contributions by retirement age. Check out welfare .ie.
 
Thanks Tentman,
Still a bit confused though.

Called Social welfare but the guy there said that 10 years missing contributions (at Class A1) would negatively affect State (Contributory) Pension and other entitlements to some degree- seems to be no facility for projected estimation of this.

Registering for credits was recommended but you have to satisfy Social Welfare that you are actively seeking employment- where's the retirement in that ? Any further advice very welcome.
 
The whole question of the way DSFA compile average contribution years can be a bit confusing. In fairness to them they have explained it pretty well in the Pensions of their website. I'm sorry, I'm not tecchie enough to upload a link.
 
Thanks Tentman

Yes - I came across that explanation after posting my last question. I think the page you refer to is this - http://www.welfare.ie/EN/Schemes/Pension/Pages/oapc.aspx under the section on "Rates".

This gives different payment bands for averaged contributions; it doesn't state exactly how average contributions are deduced; hopefully it isn't anything more complicated than dividing the total number of weekly contributions by 40; eg 52 weeks x 30 years / 40 (years).

Anyone from DSFA looking in on this discussion?
 
Thanks Tentman

Yes - I came across that explanation after posting my last question. I think the page you refer to is this - http://www.welfare.ie/EN/Schemes/Pension/Pages/oapc.aspx under the section on "Rates".

This gives different payment bands for averaged contributions; it doesn't state exactly how average contributions are deduced; hopefully it isn't anything more complicated than dividing the total number of weekly contributions by 40; eg 52 weeks x 30 years / 40 (years).

Anyone from DSFA looking in on this discussion?
 
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