# Class S contributions.  No Pension. Any come-back?



## ClickityClic (2 Apr 2009)

For 30 years I was self-employed and paid Class S contributions.  I also paid my PRSI, health levy and income tax.  I paid my accountant to deal with my finances and truted him completely.  However, he didn't inform me, nor I didn't ask, about eventual pensions etc.  Of course, when I applied for the pension, I got a very rude awakening.  Have I got anywhere to go for help or for consideration?  Is there anything I can do to get any kind of pension?


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## darag (3 Apr 2009)

Class S PRSI fully entitles you to a state contributory pension so this doesn't make sense.


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## ClickityClic (3 Apr 2009)

Thanks for that. The Pension office said that I "did not meet the minimum earnings required to be awarded the class S cons." I issued cheques for PRSI_,_ PAYE, Health levies, and anything else I was asked for.  How could all this have happened and still I'm left without?


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## darag (3 Apr 2009)

The system is extremely complicated.  However I was under the impression that five years of PRSI payments were enough to secure a contributory pension.  However there are other conditions including a minimum average number of contributions.

The sentence "did not meet the minimum earnings required" does not make any sense to me; your entitlement is not based on how much you earned in the past but on the number and distribution of your contributions.  You need to find out the exact reason for their rejection of your claim - "did not meet the minimum earnings required" is both vague and inaccurate.  Ask for the precise condition you failed to meet and insist that they point you to the exact place in their published documentation where this condition is described.


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## roker (3 Apr 2009)

Note that class "S" does not qualify for transitonal pension 65 to 66 yrs of age


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## ClickityClic (3 Apr 2009)

I was flatly turned down for the transitional pension, but thought that I would qualify for the state.  I paid PRSI  at the SO rate from '89 to '97, but they only took into consideration the payments which I made when I was otherwise employed, over a period of three years.  Darag, I will do as you suggest and post again.  There was a seminar a couple of months ago about welfare entitlements, and the officer who gave it, also gave this advise, "Never take NO for an answer". Straight from the horse's mouth!


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## Black Sheep (5 Apr 2009)

It seems very odd that your class S contributions were not included in your pension record. Have you got a record (year on year) of all PRSI payments made by you in both classes. 
If not request one from the Records Section, Gandon House, Amiens St, Dublin 1


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## Welfarite (6 Apr 2009)

could it be that you do not have the required minimum paid contributions at FULL rate PRSI, other than the class S? See this (I.ve bolded the relevant words): 

"*Number of paid contributions*

If you reached pension age before April 6 2002, you must have 156 qualifying paid contributions (a total of 3 years but they do not have to be consecutive). This means that you must have actually paid *full-rate* contributions (that is, *full stamp prior to 1979 and* Class A,E,F,G,H,N and S since then.) 
If you reach pension age on or after 6th April 2002, you will need to have 260 paid contributions (effectively 5 years contributions but they need not be consecutive). However, if you were a voluntary contributor on or before April 6 1997, you need only have 156 paid contributions if you have a yearly average of at least 20 contributions. 
If you reach pension age on or after April 6 2012, you will need to have 520 paid contributions (10 years paid contributions). *In this case, not more than 260 of the 520 contributions may be voluntary contributions.* However, if you were a voluntary contributor on or before April 6 1997 and you have a yearly average of 10 contributions, you may meet the requirement if you have a total of 520 contributions, but *only 156 need to be compulsory paid contributions*."


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## ClickityClic (6 Apr 2009)

Thanks to everyone.  I have a letter from my accountant confirming that I paid PRSI at the SO rate from 1989 to 1998.  I also have a copy of my Contribution History which shows only the very first three years of my employment. (not self-employed).
Nothing about the years '89 to'98.  What do I no next?  It would seem that I'm entitled to the pension.


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## ClickityClic (6 Apr 2009)

Thanks everybody. I have a copy of my Contribution History which only shows two years while I was employed.  Based on these payments, I'm entitled €104.70, but have been advised by the Dept. to remain on my husband's pension as a Qualified Adult, as his pension would be greater than mine. We've both been self-employed and on the SO stamp, so I presume that his pension is based on his years employment with a state body prior to our mutual self-employment.  I've been self-employed since 1970 and have paid PRSI at the SO rate from 1989/90 to 1997/98.  There is no record of these payments on the History.


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## ClickityClic (6 Apr 2009)

Would I be a *voluntary *contributor, as I was self-employed?  I have a Contributions History and it show zero for all the years from 1962/63 to 2007 even thought I paid the PRSI at the SO rate from 1989 to 1998.


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## Welfarite (7 Apr 2009)

I think you need to be talking to SW about this gap. As another poster said, its a complicated areas due to changes in the qualifying conditions over the years. The fiorst sterp would be to make sure SW have recorded all contributions due, be them compulsory, voluntary or self-employed.


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## Black Sheep (7 Apr 2009)

Were you working as an employee of your husbands business or did have seperate self-employed status


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## ClickityClic (7 Apr 2009)

We formed our own company and were both employed in it until we retired in 1997.


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## roker (8 Apr 2009)

It's easy said now, but it is a good idea to keep a record for each year, in 30 years time when you are ready to claim your memory will fail you.
They even had my PRSI wrong for 2007, when I changed employers, I was 18 contributions shorts because they only took account of one employer.


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## milic (8 Apr 2009)

Hi ClicketyClick,

With regard to your class S from 1989 to 1998, can you say what your earnings from self employment were for each year. If your earnings were below a certain level then there was no PRSI liability.

I am unsure as to what the level actually was/is. It is quite low I think. Perhaps in the region of €3,500-00pa. 

It may be that the self employment income you returned was so low that PRSI was not payable


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## milic (8 Apr 2009)

On reflection, I think the level is lower than €3500-00pa. Perhaps more like €2,000-00pa.


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## Black Sheep (9 Apr 2009)

Could it be that as a relative of a self employed person you were excluded from paying class S. See welfare.ie and perhaps your accountant was unaware of this.
Just a thought


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## darag (9 Apr 2009)

The basis of your problem seems to be that you "have paid PRSI at the SO rate from 1989/90 to 1997/98. There is no record of these payments on the History."  This is the big question mark for me.

First of all you need to confirm that you were actually paying PRSI during this period - your company accounts should be the first place to look (or your accountant during the period).

If it turns out that no PRSI was actually paid for you in the period (whether due to the threshold as others are suggesting or for some other reason), then I think you are probably out of luck.  I'd be surprised if 2 years of PRSI contributions would be enough to secure you a full contributory pension.

On the other hand, if you can confirm that contributions WERE made during the period, then you need to find out why the dept. has no record of these contributions.  Whoever was dealing with revenue on behalf of the company during the missing period probably needs to be consulted.  If the dept. corrects its records and credits you with another 8/9 years of contributions, then I'm sure you'll get your entitlement.


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## milic (9 Apr 2009)

I can now say that for the years in question if your self employment income was below 2,500 Irish pounds per annum then you had no PRSI liability and any PRSI contributions you paid to the Collector General were regarded by Social Welfare as not valid.

If this is what has happened in your case (and this would appear to be the case as SW say you did not meet "the minimum earnings" required) you should contact SW about a refund of the PRSI that you paid.


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## ClickityClic (10 Apr 2009)

Thank you all for your contributions.  I've been in touch with the accountant and I was indeed down for the absolutely minimum wage, where I had no PRSI liability.  However, PRSI was paid on my behalf, and when I made an application for the pension, I was told that I may be considered for a refund!  After much to-ing and fro-ing, they refunded me "the contributions paid in error".  Does this now mean that I'm not entitled to a pension?


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## Black Sheep (10 Apr 2009)

I'm afraid it looks like it as it appears you have insufficient contributions to qualify


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## ClickityClic (12 Apr 2009)

_If I hadn't got a refund and insisted they they acknowledge my contributions,  I wonder if I would have qualified?  This option was never put to me and I feel that they refunded me to get rid of me!_


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## Welfarite (15 Apr 2009)

You say you had no PRSi liability but paid it. Presumably, a refund was based on this and the fact that you would never qualify for a contributory pension. I note you say accountant 'had you down to the muinimum'...


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## ClickityClic (18 Apr 2009)

Th wage which I was down for was below the level where PRSI was incurred.  Even though the Welfare continued to accept it, they never showed it on my History.


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## woods (18 Apr 2009)

I have read that a woman can claim contributions for the years spent raising children. If this is true then it may help you.


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## milic (18 Apr 2009)

Hi Clickety Click

If you were not liable for PRSI, Social Welfare were correct in regarding any PRSI contributions you paid as not valid. Indeed, they would be in breach of their own code if they did anything else.

I note you say your accountant had you down for "the absolutely minimum wage". What does this mean? Are you saying that he/she understated your income in each of the years concerned? 

What was your income in each of those years? If there is any hope of progressing this matter, this kind of detail would be required.


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## Deise Doll (20 Apr 2009)

Welfarite said:


> could it be that you do not have the required minimum paid contributions at FULL rate PRSI, other than the class S? See this (I.ve bolded the relevant words):
> 
> "*Number of paid contributions*
> 
> ...


 
Welfarite could you clarify:- If you reach pension age on or after April 6 2012, you will need to have 520 paid contributions (10 years paid contributions). *In this case, not more than 260 of the 520 contributions may be voluntary contributions. *
You say 520 contributions Can these be class S? Are class S considered voluntary contributions? or does it have to be at another class?
Would be grateful if you could clarify this as this is very worrying.


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## Welfarite (21 Apr 2009)

class S are not considered as voluntary contributiosn, They are complulosry. Voluntary contributions can only be paid if you have 260 compulsory contributions paid already.


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## Mumha (28 Apr 2009)

Could someone answer the following ? (Note : I have 8.5 years PAYE stamps and 5 years S class)

1. I'm self-employed but haven't worked in 8 months. I've been paying myself a salary from the money in the company since but as I'm nearly down to about 5K in the account, I'm going to stop paying myself from the company and switch to living off what savings I have, so that I can at least continue to pay whatever bills come into the company. 

*So will that make me unemployed ?*

2. As my wife is still working and earning a decent wage, and because I've been paying Class S stamps over the last 5 years, I expect I will get nothing, monetarily, from the JB/JA.

*Is there a point me signing on ?* IIRC, a PAYEr can at least get their stamps paid by signing on even they don't qualify after a means test. Would I get my S class stamps paid ?

3. *When I set up my company initially, could I have opted to pay the full stamp* and thus have made a difference if unemployed ? Perhaps I can switch when I next (please god, soon) work ?


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## Tentman (29 Apr 2009)

ClickityClic said:


> Thank you all for your contributions. I've been in touch with the accountant and I was indeed down for the absolutely minimum wage, where I had no PRSI liability. However, PRSI was paid on my behalf, and when I made an application for the pension, I was told that I may be considered for a refund! After much to-ing and fro-ing, they refunded me "the contributions paid in error". Does this now mean that I'm not entitled to a pension?


 
If what your accountant did is the case, the you should have paid PRSI at the A rate as it would appear that you were employees of your business rather than proprietors. Proprietors usually pay at Class S . It may well have been that what you accountant was trying to do was minimize your tax liability. There are swings and roundabouts in the accountancy game and what you may have gained in the tax side, you have lost on the PRSI side.


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## Elphaba (29 Apr 2009)

Mumha said:


> Could someone answer the following ? (Note : I have 8.5 years PAYE stamps and 5 years S class)
> 
> 1. I'm self-employed but haven't worked in 8 months. I've been paying myself a salary from the money in the company since but as I'm nearly down to about 5K in the account, I'm going to stop paying myself from the company and switch to living off what savings I have, so that I can at least continue to pay whatever bills come into the company.
> 
> ...


 
Was in similar situation myself, self employed with ltd. company.
They will means test you for job seekers and take your wifes earnings into account and any savings you have, so you might not get much, if anything.

You would have to make voluntary social ins. payments your self.

You can only pay class A stamp if you are not majority shareholder in the company, i.e. if someone else controls the company, in effect you are an employee. You can set it up this way, by making someone else in control.
The scope section of social welfare deal with this and may take some time. I thought I might be better off on class A, but as class A is a higher payment they also backdate it, so ecided to stick with class S. just make sure all your class S contributions are fully up to date. (Class S you still get full contributory pension.) 2 years of paying class A would qualify you for dole. Its a minefield.

Also when assesing you for job seekers, they only take into account 2 years of your contributions, know someone unemployed, worked since he was 14, but didn't take that into consideration, since he was self employed for last 5 years paying class s. Its a minefield.


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## Welfarite (30 Apr 2009)

Elphaba said:


> Was in similar situation myself, self employed with ltd. company.
> They will means test you for job seekers and take your wifes earnings into account and any savings you have, so you might not get much, if anything.
> 
> You would have to make voluntary social ins. payments your self.
> ...


 
It's only a minefield when you try and bend the rules. The bottom line is that you are liable for Class A when an employee(i.e. can be directed in your work, can be sacked) or Class S (director/self-employed). Scope Scetion decide this, not you or your accountant. 



Elphaba said:


> Also when assesing you for job seekers, they only take into account 2 years of your contributions, know someone unemployed, worked since he was 14, but didn't take that into consideration, since he was self employed for last 5 years paying class s. Its a minefield



This doesa not make sense. No contributions are taken into consideration for assessing means on a Jobseeker's Allowance claim. If you are self-employed , they assess previous income to project what you may earn going forward. And PRSI is not payable until one is 16 years of age. Age 14 is inusrable for SW purposes


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## Elphaba (30 Apr 2009)

I never suggested bending the rules. But if you have a limited company and it is controlled by someones else with the majority of shares, then as an employee you can pay class A. The final decision of course rests with SCOPE.

My friend who was made recently unemployed only qualified for job seekers
assistance and not the full dole, despite paying class A from age 14 up to 5 years ago, he then became self employed and was told they only take the
most recent contribution 2 years or less, he was on class S for 5 years, before that class A. Why would I make this up? It is a minefield if you claim the above is untrue.


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## Welfarite (30 Apr 2009)

Elphaba said:


> Why would I make this up? It is a minefield if you claim the above is untrue.


 

I never said you made it up or that is was untrue; I said it did not make sense. But I understand it now from your last post. Firstly, as already said, the age you start paying PRSI is 16 not 14. And Jobseeker's BENEFIT is based on cons. paid in the governing year (For claims in 2009, this is 2007, two years ago). Jobseeker's Allowance( Assistance as you call it) is a means tested payment and is payable any contributions being paid.


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## Elphaba (1 May 2009)

O.k. thanks, is it a recent thing that they only take 1 years contributions into consideration for social welfare purposes. I would have thought they would take an accumulated amount over a lifetime, seems unfair?


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## Welfarite (7 May 2009)

Elphaba said:


> O.k. thanks, is it a recent thing that they only take 1 years contributions into consideration for social welfare purposes. I would have thought they would take an accumulated amount over a lifetime, seems unfair?


 

It has always been the case that they looked at agoverning year for the second qualifying condition (39 paid or credited basically, years ago it used to be only 26 in the GCY!). The first condition of having 104 contributions paid (rather than 52) is as recent as the first 2009 budget.


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## Mumha (8 May 2009)

Thanks for your help. It sounds like there isn't much point in signing on. Today is my last day of paying myself wage from the company funds, so will have to start hitting my savings as of next week.


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## Welfarite (8 May 2009)

Mumha said:


> Thanks for your help. It sounds like there isn't much point in signing on. Today is my last day of paying myself wage from the company funds, so will have to start hitting my savings as of next week.


 

Before you decide, it might be best to call to your local SW office and talk to the Information Officer there; or call to Citizen's Information Centre. Best to be sure before you make a decision that might have huge effects on pensions and the like down the line!


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## ClickityClic (15 Aug 2009)

Thank to everybody for remarks, advice etc.  My earnings were under 2500 per annum,  I paid PRSI for the ten years, and eventually I was refunded.   Have I any redress at all?
Are there any grounds on which I could appeal?


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## Black Sheep (16 Aug 2009)

Perhaps your Accountant's advice was not in your best interest when you paid PRSI without checking with the Scope section as to the appropriate rate of PRSI payable by you
As you have had your PRSI refunded I can't see any grounds for an appeals


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## ClickityClic (18 Aug 2009)

Thanks for that.  It's really what my common sense tell me too.  Another question, please, where do I stand if I am widowed?


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## Black Sheep (19 Aug 2009)

Assuming that your husband has a State Pension and a qualified portion for you, You could apply for a widows pension based on his PRSI record


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