# Rental income as income for pension purposes



## raisinette (30 Aug 2016)

Hi,
  my wife is disabled and has never work (no PRSI/stamp) and no income. My earnings preclude any means tested entitlement. Both now 50 and concerned that she has no pension. We have a jointly held rental property. Could rental income from this property be income for my wife upon which she could pay class A or S and begin paying towards a contributory pension at 68?


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## Mrs Vimes (30 Aug 2016)

Rental income is "unearned income" so it is not allowable for pension payments. I believe the rationale is that retirement does not cause a drop in rental income as it does in earned income.


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## raisinette (30 Aug 2016)

Mrs Vimes said:


> Rental income is "unearned income" so it is not allowable for pension payments. I believe the rationale is that retirement does not cause a drop in rental income as it does in earned income.


I should clarify that I'm talking about PRSI contributions leading to a contributory old-age pension (at 68). According to calls I made today to Revenue/Pensions (crossed between both), self-assessed income over €5K triggers Class S contributions (4%). As I say, I'm piecing this together from calls to Revenue/Pensions but so far it seems correct.


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## cremeegg (30 Aug 2016)

Mrs Vimes said:


> Rental income is "unearned income" so it is not allowable for pension payments.



Are you sure about this Mrs. Vimes. I don't think this has been the case for a number of years.


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## Mrs Vimes (1 Sep 2016)

I wouldn't claim to be up-to-date on the topic .  Would you have any idea when it changed?

It always made sense to me that you couldn't retire from unearned income. 

Note that I was answering a different question to the one asked anyway!


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## Jon Stark (1 Sep 2016)

Mrs Vimes said:


> I wouldn't claim to be up-to-date on the topic .  Would you have any idea when it changed?
> 
> It always made sense to me that you couldn't retire from unearned income.
> 
> Note that I was answering a different question to the one asked anyway!



I think there's crossed wires here. You're talking about the calculation of Net Relevant Earnings for the purpose of calculating the maximum amount that a person can contribute to a private pension / AVC / PRSA, and you're correct.

And as the OP has now clarified, he's talking about paying PRSI to qualify for a contributory state pension.


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