# Denied a full contributory pension because she had worked in the 50's



## serotoninsid (30 Apr 2006)

A relative was denied a full contributory pension on the basis that she had worked a job in the 50's (lasted a few months) - she worked ten years in the '90s.  

If she had not worked the job in the 50's, she would have been entitled to the full pension based on the ten years worked in more recent times.

Can anyone shed any light on the logic (there may well not be any but if there is, it would be interesting to know) behind this?

Usually its a case of not having worked enough - this appears to be reverse logic.  Needless to say, She has rang Sligo and asked the question but a phone call to that place never leaves the caller any further up the path to enlightenment.


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## Alba Longa (30 Apr 2006)

If she hadn't worked during that  period in the fifties, how could she be entitled to a full contributory pension now with only ten year's contributions?
I can't grip understanding of the old age pension scheme in Ireland.


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## ajapale (30 Apr 2006)

Anything usefull


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## Brendan Burgess (30 Apr 2006)

Hi Sid

The Social Welfare system is full of anomalies and I have come across this one before.  I don't remember the detail, but to qualify for a pension you need to have an average of say 60% contributions during your working life.

If you work from the age of 20 to 30 and again from  50 to 60, you will have worked for 20 years out of 40,and so your average is 50%.

If you did not work in the earlier period, you will have 10 years contributions during a working life of ten years and so your average will be 100%. 

It's crazy, but it's the way it works.

Brendan


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## Murt10 (30 Apr 2006)

Another anomaly that I find really unfair and annoying is the tiny difference between what is paid under the contributory V  non-contriburory schemes.

For the Old age pensioon for example, a person who has contributed all his life, and paid tax and PRSI on all his earned income, will be entitled to a contributory pension of E193.30pw  from the State. 

Someone who hasn't worked a day in his life or made any contribution to the Social Welfare fund is entitled to a pension of E182.00 pw (following a means test).

E11.30 pw better off. Hardly a good return on your investment. 


Murt


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## justsally (30 Apr 2006)

It does seem to be a crazy situation but,

in addition to having the required 520 class A contributions (10 years) one also has to have a certain yearly average.

The yearly average is unfortunately gauged by counting the years from when one first enters  insurable employment to the year prior to reaching pensionable age.   Whether one is employed or not in the intervening years these are taken in when the assessment is being made, because the number of contributions is divided by the number of years and the resulting figure is the "yearly average".    The "yearly average"  is one of the conditions attached to pension qualifications.


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## Brendan Burgess (1 May 2006)

Hi Murt

That anomaly is easier to understand. 

The non-contributory pension is means tested. You only get it if you have no other income. It's part of the net which the welfare state has to provide. 

You get the contributory pension irrespective of your other income. 

It's still an anomaly, but some people have been unable to get work during their whole life so they have to get something.

Brendan


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## justsally (1 May 2006)

If they couldn't get work they should have been advised to sign on for "credits" as soon as they finished their last class A contribution work - because "Paid and credited contributions" are added together and taken into account when extracting the number of contributions to obtain the "yearly average".   Problem is, not many people understood, in my opinion, the value of these credits in the past. 

Hope I'm not confuddling anybody.


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## Fanny (4 May 2006)

I'm working part-time 24h week, three full days a week, and will do for the forseeable future. 
Some of my payslips show the PRSI rate: AL others PRSI: A0, I also pay into a PRSA. Now I am getting abit worried, as I don't know what will apply the contributory or non-contributory pension. How can I find out, I am flexible to change my work pattern if required (although it will be part-time) and I have also missed years at the start of my career due to a long-lasting college education.
If I have a PRSA and my pension would be means-tested, will my PRSA help at all?
How can I find out more? 

Fanny


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## justsally (4 May 2006)

Fanny,

AO etc indicates the amount of PRSI you pay.    It is still an A contribution from the point of social welfare but AFAIK the AO and AL contributions pay a reduced amount via P.R.S.I.   A contributions are the most important ones from the point of view of benefits, pensions etc.    I would suggest that you contact Pensions Forecast Section, Department of Social Welfare, they will tell you how many contributions presently appear on your record and how many you will require for the various benefits.   You could always go along to your local TD, give him/her the details and it will be followed up for you.   Don't panic *s*.

Good luck

Justsally


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## dublady (4 May 2006)

The subclass of PRSI you pay depends on your income in a specific pay period. Once you're getting a Class A contribution, it doesn't matter what the subclass is (e.g. AO, AX, AL, A1, A2 etc). All subclasses within Class A are reckonable for Old Age Contributory Pension (and other payments too)regardless of whether you actually pay PRSI. 

If a person earns €300 a week or less they are insurable at Subclass AO and they don't actually pay PRSI but the person would still have a paid contribution as their employer is paying the employer's share. Sorry if this is confusing.

http://www.welfare.ie/publications/sw19/sw19_sect1.html#classa

When someone applies for Old Age Contributory Pension, it's their yearly average of contributions (paid or credited) since they first entered employment that they take into account.

Hope this helps


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## justsally (4 May 2006)

but if you reach pensionable aged after 2012 you also need 520 class A contributions in addition to your "yearly average". The 520 class contributions is the first applicable condition.


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## dublady (4 May 2006)

True Sally. The SW pension area is very complex. There are lots of determining factors that are taken into account when a person applies for a OACP or RP.

Here's two useful links which might help.
http://www.welfare.ie/publications/sw111.html
http://www.welfare.ie/publications/sw112.html


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## Fanny (5 May 2006)

Thanks for all that info. 
So if I work in a regular part time job and have my A-contributions every month I'm not doing too badly? Will the amount you have earned play a role in the end or is it just the regular class-A contributions? As I have worked in another European country before, but not paid much into their social pension system, it is a little hard to figure it out. When I understand coorectly the Irish contributory pension is not directly linked to the amount of your actual salary? So I do not necessarily have a disadvantage as a part timer, and its worth paying into my PRSA? 

Fanny



			
				dublady said:
			
		

> True Sally. The SW pension area is very complex. There are lots of determining factors that are taken into account when a person applies for a OACP or RP.
> 
> Here's two useful links which might help.
> http://www.welfare.ie/publications/sw111.html
> http://www.welfare.ie/publications/sw112.html


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## serotoninsid (29 May 2006)

My original query has progressed to the stage where the person in question has qualified for a reduced contributory pension - and would also not be entitled to the full non-contributory as a result of savings over the allowed €40k.

Q. Can excess savings be
(i). spent on anything
(ii). spent on specific things
to enable her to meet the qualifying criteria for a full non-contributory?  Once this is done, can she request that her case be reassessed immediately?


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## Fanny (17 Jun 2006)

That's interesting (see below), any answers? 
As I lived in another country (self-employed, not in a pensionable job) and also studied for many years, I am also afraid I might not meet the criteria for a full pension later from a point of 520 contributions! But I have a small bit of savings AND pay to a PRSA. Can one buy contribution years?
fanny



			
				serotoninsid said:
			
		

> My original query has progressed to the stage where the person in question has qualified for a reduced contributory pension - and would also not be entitled to the full non-contributory as a result of savings over the allowed €40k.
> 
> Q. Can excess savings be
> (i). spent on anything
> ...


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## justsally (18 Jun 2006)

> Can one buy contribution years?


 

Hello Fanny,

If by buying extra years you mean voluntary contributions I don't think this can be done unless you have the required 520 contributions.  At present the voluntary contributions cannot be made unless one has the required 260 paid contributions. But to be sure, to be sure, check it out on the Oasis site.


Justsally.


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## serotoninsid (27 Jun 2006)

serotoninsid said:
			
		

> My original query has progressed to the stage where the person in question has qualified for a reduced contributory pension - and would also not be entitled to the full non-contributory as a result of savings over the allowed €40k.
> 
> Q. Can excess savings be
> (i). spent on anything
> ...


Can anyone help me with this question.  I am still trying to find an answer for the person concerned.


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## dublady (28 Jun 2006)

This is taken from here http://www.welfare.ie/publications/sw16.html#3

'If you or your spouse or partner deprive yourselves of an income or property (including money) to qualify for Old Age Non-Contributory Pension or to qualify for this pension at a higher rate, we will include that income or property in the means test. However, this may not apply in the case of certain family settlements involving the transfer or ownership of a farm or a business.'

I think the best advice is for the person in question to apply for the pension and see what way they will be assessed.

There's a useful publication called Pensioners and Savings 2006.
http://www.welfare.ie/publications/sw60.pdf

By the way there are going to be changes in September 2006 when the name changes to State Pension (Non-Contributory). The first €20 of means will be disregarded.

Hope this helps


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## dublady (28 Jun 2006)

I also meant to say that a person can have savings up to €27.999.99 (single) or €55,999.99 (married or cohabiting) and still get the maximum rate of Old Age Non-Contributory Pension because of the way the means disregard works.

These figures will be increased in late September to approximately €36,000 (single) and €72,000 (married or cohabiting).

Sorry if this is confusing. PM if you need more help.


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## Bedlam (27 Jun 2007)

Where a married couple hold joint savings accounts is there any point in taking one name off the account and applying for the non contrib. pension?


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## ClubMan (27 Jun 2007)

I thought that all savings of a married couple were considered shared for the purposes of the means test and were approptioned 50:50 regardless of the names on accounts etc.?


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## z108 (27 Jun 2007)

Brendan said:


> The Social Welfare system is full of anomalies and I have come across this one before.  I don't remember the detail, but to qualify for a pension you need to have an average of say 60% contributions during your working life.
> 
> If you work from the age of 20 to 30 and again from  50 to 60, you will have worked for 20 years out of 40,and so your average is 50%.
> 
> ...



so could you theoretically begin  your working life at 61 , work for 5 years, pay contributions for 3 of them and then get the  contributory pension at 66


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## Guest126 (27 Jun 2007)

Sign - I presume you meant to say the contributory pension at age 65?

The non-contributory is based on a means test, not on PRSI contributions.
It is not paid until age 66.


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## z108 (27 Jun 2007)

oops yes I corrected it. Thanks CapitalCCC . I hope I explained what I mean,  give or take a year or 2 around my example . 

Can anyone answer my question


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## Guest126 (27 Jun 2007)

Ring Sligo I would imagine - I can't imagine there are too many people who have actually been in this situation!


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## z108 (27 Jun 2007)

I dont want to spend hours on hold for a question which doesnt affect me anyway thanks 
I just wondered if that was the gist of what Brendan was saying earlier.


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## gipimann (27 Jun 2007)

sign, a quick glance at welfare.ie gives the following:

To qualify for the state pension (contributory) - aka the old age contributory pension -

The first contribution must be paid before age 56 for persons born after 1/10/1922 and a person must have paid 260 full rate contributions if retirement is before 2012 (it rises to 520 after that date).

There are other ifs and ands and qualifying conditions, but I think the info above rules out your idea of a speedily-earned pension!

Brendan's anomaly does exist, in general the qualifying period for counting reckonable PRSI contributions begins on the date of first insurable employment.


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