# ARF drawdown and S1 PRSI



## Prittstick (3 Mar 2015)

A retired collegue has had an ARF for a few years since retirement.
2014 was the first year that he was over 60 and therefore had to take his 5% drawdown.

He realised that he had to pay Income Tax, USc and PRSI at 4%, Class S1 on this drawdown. Thats all fine.

However, he has just received his P60 from the ARF company and it says' Number of weeks of insurable employment = 1. He had been expecting this to say 52 weeks, as he has obviously been 'employed' the full year in the ARF.

This has important implications, as he needs the 52 annual contributions at Class S, (for the next few years)  to ensure his average PRSI contributions are above the 48 so he gets the full State Pension at 66.

This 1 contribution seems incorrect...if you are employed for a month, for example, you get 4 contributions, eventhough you get paid once in the  month. 

His Gross Drawdown was 20,000 so he was deducted 800 euro (4%) for 1 contribution!!

Any thoughts, please


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## Gervan (4 Mar 2015)

First, I don't think the Prsi class will be S1. Your colleague is retired, no longer self employed I think.

The P60 would have been based on the tax credit cert held by the company paying out the funds. Did your colleague not receive a copy of this?
It could be on a week 1 basis. 

Not knowing what other income your friend has, I can't say, but some of the Prsi may be reclaimable on submitting a tax return for 2014.
The minimum voluntary contribution to maintain pension entitlements is €500.


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## Trainspotter (4 Mar 2015)

Gervan said:


> First, I don't think the Prsi class will be S1. Your colleague is retired, no longer self employed I think.
> 
> The P60 would have been based on the tax credit cert held by the company paying out the funds. Did your colleague not receive a copy of this?
> It could be on a week 1 basis.
> ...


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## Trainspotter (4 Mar 2015)

Ok Just to give my experience with ARF Income.I retired in 2014 @ 65 Mid May,so I decided to take my income on a Monthly Basis from the Fund.This worked out at 0.416667% of the available pot of money per month, this figure is based on 5% p.a. i.e. 5% divided by 12. I had in place my updated Tax Cert for credits and SRCOP etc. so the Insurance Company could deduct correct PAYE/USC/PRSI.When the first Payslip came through I checked it out and all was in order,this was for July'14. The PRSI deduction was for 4% AND was Class S0 with total Ins Weeks of 4.Subsequent monthly payments all indicated this,so by the year's end they had totaled 26 ins.Weeks @ Class S
Up to my Retirement date I was paying PRSI @ A1 Rate I had 21 of these payments,but the employer stated they owed me some money,so I was paid this with *ONE  PRSI deduction of A1 Class so total is 22.* It seems that if only the 5% Imputed withdrawal is availed of at years end it is probably classed as just one payment, but do check with your ARF payment provider. *My P60 only indicates* *The ARF PRSI deduction and not my previous employer's PRSI Deductions *.

What I suggest here is to request your PRSI record for the year in question from www.welfare.ie, and check to see if the contribution is reckonable for qualifying for the state pension contributory based on your Class S Deduction. I have requested mine for 2014 but as yet there is no reply.

It should be noted that if you receive a Monthly or Weekly salary,PRSI contributions are based on the number of Mondays in the Month. The PRSI year starts on the first Monday of January,so if Say Jan has 4 Mondays The Number of Wks.Contribution is 4, If May has 5 Mondays then it is 5 etc.
I do hope this is of some help to you


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## Trainspotter (5 Mar 2015)

Just a Error on my behalf of the PRSI Year.It is not based on the Number of Mondays as I thought,but rather on the the 1st Of Jan.Each Year.
So for 2015 The 1st of Jan is on a Thursday So wk.1 is 1st to 7th of Jan. which is Wednesday,2nd Week is 8th of Jan. Thursday,to 14th Jan. Wednesday,and so on through the year.There will be a Total of 52 Contribution weeks for 2015

Apologies for Error


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## mtk (11 Mar 2015)

I remember checking welfare.ie indicates that prsi on arf which is S1 means eligible for state pension ( cannot find page again) but little else


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