# Qualifying for the state pension - requirements



## Blackrock1 (14 Nov 2019)

I cant remember if this was answered before, but my wife has worked full time for the past 15 years or so, and been a higher rate tax payer for most of that. In the future we may look to cut down on this or even have her take a career break.

I am mindful of the value of the state pension, with the above in mind what do we need to consider to make sure she is entitled to a full state pension on retirement (if such a thing exists at that point)


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## Conan (14 Nov 2019)

Currently to get a full State Pension she would need an average of 48 weekly contributions per annum over her PRSI history. 
However there are plans  to change the calculation in the next 2 to 3 years. The proposal is to move to a 1/40th for each year of PRSI contribution. So  history of 40 years contributions (including credits) would be required to get the full pension.


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## Saavy99 (14 Nov 2019)

She can also  opt to pay.voluntary prsii  insurance


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## Blackrock1 (15 Nov 2019)

Conan said:


> Currently to get a full State Pension she would need an average of 48 weekly contributions per annum over her PRSI history.
> However there are plans  to change the calculation in the next 2 to 3 years. The proposal is to move to a 1/40th for each year of PRSI contribution. So  history of 40 years contributions (including credits) would be required to get the full pension.



sorry i dont get the first point, does it mean you need to make 48 weekly contributions on average from the day you start work until you retire?

and on the proposal mentioned the euro value of contributions dont matter just that you are making contributions?


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## Conan (15 Nov 2019)

Blackrock
Under the current rules, the main conditions you need to qualify for a full State Pension  are:
- paid a minimum of 520 (10 years) contributions , and
- have an average of a least 48 contributions per annum over your PRSI history ( from when you first started paying PRSI and up to the December before your 66 birthday). 
If the average is less, then the State Pension is reduced. So for example, if the average is between 40 and 48, then you get a 98% Pension . If the average is between 30 and 39, you get 90%


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## Sarenco (15 Nov 2019)

Probably worth noting that we are due to move to a total contribution approach from next year -





__





						State Pension (Contributory)
					

The State Pension (Contributory), previously called the Old Age (Contributory) Pension, is payable to people aged 66 and over who have worked and paid enough social insurance contributions.




					www.citizensinformation.ie


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## Conan (15 Nov 2019)

Sarenco
We were due to move to  a TCA  next year, but I understand that this is now  not likely to happen until perhaps 2022.


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## Sarenco (15 Nov 2019)

I'm sure you're right @Conan but the Minister is still insisting that the intention is to move to TCA in Q3 2020.  









						State Pension (Contributory)
					

State Pension (Contributory) Dáil Éireann Debate, Thursday - 4 April 2019



					www.oireachtas.ie


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## joe sod (15 Nov 2019)

Conan said:


> Currently to get a full State Pension she would need an average of 48 weekly contributions per annum over her PRSI history.
> However there are plans  to change the calculation in the next 2 to 3 years. The proposal is to move to a 1/40th for each year of PRSI contribution. So  history of 40 years contributions (including credits) would be required to get the full pension.


 
so a person retiring in 2023 will be assessed for pension based on  40 years of contributions, homemakers will get a credit for 20 years of child rearing while outside the workforce? This will be a significant change and will mean that many people from 2023 will not qualify for a full state pension. I can imagine when the reality of this hits home there will be enormous pressure to extend the special "homemakers credit" to many more groups. 
However currently even if you dont have full prsi contributions you are not heavily penalised you still get most of the pension anyway. What if they also changed this gradation to be linear in that if you only have 20 years full contributions you get only half the full state pension?


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## Conan (16 Nov 2019)

Under the proposed TCA system you would get 1/40th of a State Pension for each year of contributions (or credits). The Homemaker credits have been changed more recently so that those out of the workforce minding children can now get credits for years prior to 1994.
So the TCA system Will be more equitable. Perhaps the Minister will hit the Q3 2020 target,  but it's not what I am hearing from Dept sources.


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## joe sod (16 Nov 2019)

Conan said:


> Perhaps the Minister will hit the Q3 2020 target,



you can see why they didn't bring this in  sooner, they want to get it by the next election, it will be highly unpopular, of course most people not being numerate don't realise the implications yet. The same thing happened after the 2012 changes , there wasn't a whimper until people  actually began receiving their pensions.



Conan said:


> So the TCA system Will be more equitable



yes but there will be no beneficiaries , people that are highly advantaged by the current system, namely people that only started working in ireland much later in life will now have that advantage removed again


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## Saavy99 (16 Nov 2019)

joe sod said:


> you can see why they didn't bring this in  sooner, they want to get it by the next election, it will be highly unpopular, of course most people not being numerate don't realise the implications yet. The same thing happened after the 2012 changes , there wasn't a whimper until people started actually began receiving their pensions.
> 
> 
> 
> yes but there will be no beneficiaries , people that are highly advantaged by the current system, namely people that only started working in ireland much later in life will now have that advantage removed again



They might put in  an option of buying back years.similiar to UK system.


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## Conan (16 Nov 2019)

One of the inequities of the current system is that it is possible to get a full State Pension with only 10 years of contributions (if you first entered the PRSI system at say age 55). Meanwhile someone with a 40 year history, but with a gap in their record, would perhaps not get a full Pension. The TCA proposes a strictly proportionate payment. More equitable.


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## The Horseman (16 Nov 2019)

Am I right in thinking you need 2000 stamps to get a full state pension.


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## Cervelo (16 Nov 2019)

Conan said:


> Blackrock
> Under the current rules, the main conditions you need to qualify for a full State Pension  are:
> - paid a minimum of 520 (10 years) contributions , and
> - have an average of a least 48 contributions per annum over your PRSI history ( from when you first started paying PRSI and up to the December before your 66 birthday).
> If the average is less, then the State Pension is reduced. So for example, if the average is between 40 and 48, then you get a 98% Pension . If the average is between 30 and 39, you get 90%



Sorry but can I ask a question about the "average contributions"??
I'm 52 now and am currently fully retired from paye employment since I turned 50 and am now making voluntary PRSI contributions. 
I started working as soon as I turned 16 in my family's business, so does the average rule of 48 contributions per annum apply to me or someone who started working early right up to the current retirement age of 68 ??


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## Conan (16 Nov 2019)

Blackrock 
Yes, but the system is due to change in the next few years. But you should continue to pay contributions or sign on for credits (If possible).


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## Saavy99 (16 Nov 2019)

Cervelo said:


> Sorry but can I ask a question about the "average contributions"??
> I'm 52 now and am currently fully retired from paye employment since I turned 50 and am now making voluntary PRSI contributions.
> I started working as soon as I turned 16 in my family's business, so does the average rule of 48 contributions per annum apply to me or someone who started working early right up to the current retirement age of 68 ??



By the time you will retire, the total contribution  approach.will be well in place. I have seen the figure 40 years floating about but I think it will be far lower.possible 35 or 30 years. Currently half the country.rely.sorely on the.state.pension and given Ireland's past.history.of high.unemployment.and.high emigration, The 40 year reqyirment.of full prsi.contributions would.be.near impossible.for hundreds.of thousands of people.


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## joe sod (16 Nov 2019)

Saavy99 said:


> The 40 year reqyirment.of full prsi.contributions would.be.near impossible.for hundreds.of thousands of people.



also the immigrant council of ireland will have alot to say as the current system is actually very beneficial to immigrants although i would say that very few have actually reached pension age yet so have not benefited  from this anomoly.
But the current system is unsustainable, at least this measure will make the pension system fair, at least this is better than means testing the pension and denying someone that has made 40 years of contributions a full state pension. There are alot of difficult decisions for politicians to make in the next decade


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## Hooverfish (16 Nov 2019)

Cervelo said:


> Sorry but can I ask a question about the "average contributions"??



There's good information here: https://www.citizensinformation.ie/...etired_people/state_pension_contributory.html

@The Horseman - same page, contributions for full pension are 2080. Maximum credited contributions are 10 years /520. Maximum homecare and credited contributions cannot be more than 20 years / 1040.


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## The Horseman (16 Nov 2019)

Hooverfish said:


> There's good information here: https://www.citizensinformation.ie/...etired_people/state_pension_contributory.html
> 
> @The Horseman - same page, contributions for full pension are 2080. Maximum credited contributions are 10 years /520. Maximum homecare and credited contributions cannot be more than 20 years / 1040.


Thks


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## Conan (16 Nov 2019)

joe sod said:


> also the immigrant council of ireland will have alot to say as the current system is actually very beneficial to immigrants although i would say that very few have actually reached pension age yet so have not benefited  from this anomoly.
> But the current system is unsustainable, at least this measure will make the pension system fair, at least this is better than means testing the pension and denying someone that has made 40 years of contributions a full state pension. There are alot of difficult decisions for politicians to make in the next decade


Not sure the Immigrant Council would have a valid case. Why should someone with only 10 years contributions get a full pension when someone with say 30 years contributions ( over say a 40 year record) get a lower pension? Equality works both ways.


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## Cervelo (17 Nov 2019)

So as it stands now once I hit the 2080 PRSI contributions (40 full years) I could technically stop paying PRSI at age 56 and receive a full state pension at 68 ??


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## The Horseman (17 Nov 2019)

Cervelo said:


> So as it stands now once I hit the 2080 PRSI contributions (40 full years) I could technically stop paying PRSI at age 56 and receive a full state pension at 68 ??



That's what I was thinking. Can you instruct your employer to stop deducting prsi ?


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## Saavy99 (17 Nov 2019)

The Horseman said:


> That's what I was thinking. Can you instruct your employer to stop deducting prsi ?



No you cant,  prsi contributions are not paid sorely for eligibility for state pensions. They cover public health, unemployment benefits, widows pensions etc.


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## Early Riser (17 Nov 2019)

Cervelo said:


> So as it stands now once I hit the 2080 PRSI contributions (40 full years) I could technically stop paying PRSI at age 56 and receive a full state pension at 68 ??



  You could technically move employment to NI/Britain at 56 and build up partial state pension entitlements there, while keeping full Irish entitlements (assuming the total contribution approach comes into effect here in the meantime). You would have to be prompt as I think 10 years is the minimum contribution period under the new UK rules and the pension age is moving to 67 within the next decade.


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## Sandpiper (2 Jul 2020)

Conan said:


> . The Homemaker credits have been changed more recently so that those out of the workforce minding children can now get credits for years prior to 1994.


I can't find any current information about the extension of the Homemaker credits to years prior to 1994.  Is it still to be enacted?


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## Conan (2 Jul 2020)

The credits for years prior to 1994 is called “Home Caring Periods Scheme”. Check on Welfare.ie  or Citizens Information websites.


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## Sandpiper (3 Jul 2020)

Conan said:


> The credits for years prior to 1994 is called “Home Caring Periods Scheme”. Check on Welfare.ie  or Citizens Information websites.


Thank you for the information - I was initially finding only the the original 1994 scheme.  
Under this new version, does a person have to have 520 PAID full contributions before the credits are allowed in the calculation?  If a person has 300+ Class D payments, has 120 Class A plus 19 years of Home Caring credits, is there a chance they will qualify for a reduced contributory pension? As this person is almost 65 now and hasn't worked for 8 years, I'm assuming they cannot now pay voluntary contributions to satisfy the need to have 520 paid contributions?


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