# State Pension Entitlement



## Daddy Ireland (7 Jun 2019)

Are a married couple who have been PAYE workers majority of their working lives entitled to a full state pension at top rate currently of €248.30 each on reaching pension age.


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## Feemar5 (7 Jun 2019)

Yes if they satisfy the paid contributions and started paying before the age of 56.     You must have 10 years contributions.


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## Conan (8 Jun 2019)

Under current rules (due to change in 2020 or 2021) you must have an average paid/credited contribution rate of more than 48 per annum from when you first entered the workforce up to the Dec before your 66th birthday. If your yearly average is less than 48 pa then you get a reduced rate. So for example if your average is between 40 and 48 then you get a 98% Pension, if between 30 and 39 then you get a 90% Pension. You need a minimum of 520 paid contributions (10 years) to get the minimum pension of 40%.


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## Daenis (8 Jun 2019)

there is also something about If they worked in other countries for a period of time (e.g. UK) and have a pension entitlement there i think the DEASP will assist them in applying for those pensions and then reduce the Irish pension by that amount so they still only receive the top rate.


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## Daddy Ireland (8 Jun 2019)

Thanks for replies.  Just one other related query.  Spouse 1 is 65 and retires.  Spouse 2 is 58 and retires on ill health grounds having worked for 30 + years.  Referring to Conan post 3 above will this effect Spouse 2's entitlement to a full state pension.


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## Conan (8 Jun 2019)

Daddy Ireland said:


> Thanks for replies.  Just one other related query.  Spouse 1 is 65 and retires.  Spouse 2 is 58 and retires on ill health grounds having worked for 30 + years.  Referring to Conan post 3 above will this effect Spouse 2's entitlement to a full state pension.


If Spouse 2 has 9 or 10 years to go to receiving the State Pension (age 68 after 2028) then she should sign on for credits each year until retirement age. The formula for calculating the State Pension is due to change in 2020 or 2021 and I expect we will see a formula of 1/40th of the State Pension for each year of contribution/ credit. Exact details are awaited from the Dept.


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## Daddy Ireland (8 Jun 2019)

Thanks Conan.  How does one sign on for credits ?


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## Conan (8 Jun 2019)

You can sign on in your local Intreo (Social Welfare) office. Once she retires she should call into the local office and explain what she wants to do. If she is getting Disability or Illness Beneit from SW then credits will automatically be added to her record.


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## Daddy Ireland (8 Jun 2019)

Thanks my spouse is receiving Invalidity Pension so credits are accumulating.


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## WaterWater (9 Jun 2019)

Daddy Ireland said:


> Thanks my spouse is receiving Invalidity Pension so credits are accumulating.


Is it Invalidity Pension or Illness Benefit she is receiving?  I think if she is receiving Invalidity Pension then she will automatically qualify for full state pension at 66.


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## Daddy Ireland (9 Jun 2019)

Thanks.  Yes Invalidity Pension.


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## fayf (11 Jun 2019)

Conan said:


> The formula for calculating the State Pension is due to change in 2020 or 2021 and I expect we will see a formula of 1/40th of the State Pension for each year of contribution/ credit. Exact details are awaited from the Dept.


Very interesting information. 

Thats a substantial reduction of credits required on the current regime, where you have to have an annual average of 48 credits per year, from when one first started paying PRSI,(or receiving credited contributions) up to age 66.

In short, it would mean a whole lot more people would qualify for the full state contributory pension amount, but that would also mean, a considerable extra cost to the exchequer.

Is this really the current expectations as to what will happen ? Moving effectively from 1/48 up to 1/40 ? as it doesen’t sound very realistic, unless this is coupled with an increase in the age that the payment is effective from. Maybe 68 to 70.


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## Conan (11 Jun 2019)

Your interpretation is not quite correct.
Under the current system you need an average of 48 weekly contributions per annum over your working life.  Yes for some that might mean over  45 year period or more.  But equally if you only entered the workforce at say age 40 or 50 , then you still only need a yearly average of 48 (circa 1000 contributions). And if you are below 48 the reduction in pension is very small e.g. 98% or 90%.

The proposed new rules are more equitable in that to get the max, you need a 40 year record (2080 contributions). 
So on balance I suspect that the overall cost to the State (us) will be lower.


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## Sarenco (11 Jun 2019)

Conan said:


> The proposed new rules are more equitable in that to get the max, you need a *40 year record *(2080 contributions).


I'm not sure that has been finalised yet - aren't we waiting for an announcement at the end of the month on the design of the new rules?


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## fayf (11 Jun 2019)

@Conan, thanks for clarifying, that is a bit different alright !


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## michaelm (11 Jun 2019)

Sarenco said:


> I'm not sure that has been finalised yet


They seem to have a good idea on how it will operate, see http://www.welfare.ie/en/downloads/TotalContributionsApproach_PensionerScenarios.pdf
It's also explained to some degree under the Pensions entry on the Citizens Information website.


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## Sarenco (11 Jun 2019)

Yes but prior to finalising the design of the total contribution approach, the Government still has a number of decisions to make.  

One paper suggested that 30 years of contributions would be required to secure a maximum State pension, whereas another (later) paper suggested that 40 years would be required.  

Unless I missed it, I believe we are still waiting for a final Government decision on this point.


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## michaelm (11 Jun 2019)

Similar to what Conan was saying methinks it will just be based on 40 years contributions/credits.  So 2080 contributions/credits would be required for a 100% pension.  If you've fewer than that then just work out the percentage.  Credits(inc. Home Carer credits) capped at 1040.


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## Sarenco (11 Jun 2019)

Well, that won't go down well with the Bearded Ones in Liberty Hall...








						State pension: lack of clarity criticised as changes delayed
					

Forty years’ contributions for full-rate pension unachievable for older workers – Ictu




					www.irishtimes.com


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## michaelm (11 Jun 2019)

As you say, maybe it's not quite finalised . . I like the proposed new system, perhaps those in LH will be persuaded if there is an extended transition period whereby people can opt for their pension to be calculated under the old system.


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## Sarenco (11 Jun 2019)

Surely that would just be another example of an older cohort being advantaged over their younger peers?


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## fayf (11 Jun 2019)

Budget 2020 planning is well underway, so we won’t have to wait long for news on this, as some clearer indication of the path forward, will need to be given by budget day in October. 

This is one of those very far reaching and impacting issues, where it may take an extended period of debate and changes, before we see the final details emerging, which i’d guess will not be until the new year.


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## Conan (11 Jun 2019)

I expect we will see some clarity well in advance of Budget Day. The Minister has indicated that the 1/40th Rule will apply, which is more equitable that the current system. This is partly wrapped up in the proposed Auto Enrollment scheme, but the proposed SW changes are long overdue. 
There was a suggestion that they may introduce a “transition period” for a few years after 2020, but again we will just have to wait and see.


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## Mikey9 (26 Feb 2021)

Conan said:


> Under current rules (due to change in 2020 or 2021) you must have an average paid/credited contribution rate of more than 48 per annum from when you first entered the workforce up to the Dec before your 66th birthday. If your yearly average is less than 48 pa then you get a reduced rate. So for example if your average is between 40 and 48 then you get a 98% Pension, if between 30 and 39 then you get a 90% Pension. You need a minimum of 520 paid contributions (10 years) to get the minimum pension of 40%.


I dont understand the last line . Does or is it suppose to mean that you need a maximun  of 520 paid contributions to get the maximun pension of €248.30


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## Conan (26 Feb 2021)

No.
In order to get any State Pension you need at least 520 PAID contributions. If you have the minimum number of contributions, then the actual amount of the State Pension you will get will be the greater of:
- that produced under the “total and average” calculation (as I outlined in this post), or
- 1/40th of the State Pension for each year of contribution


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## Mikey9 (26 Feb 2021)

Conan said:


> No.
> In order to get any State Pension you need at least 520 PAID contributions. If you have the minimum number of contributions, then the actual amount of the State Pension you will get will be the greater of:
> - that produced under the “total and average” calculation (as I outlined in this post), or
> - 1/40th of the State Pension for each year of contribution


I have 299 contributions Have you any idea of value ?


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## jim (27 Feb 2021)

Daenis said:


> there is also something about If they worked in other countries for a period of time (e.g. UK) and have a pension entitlement there i think the DEASP will assist them in applying for those pensions and then reduce the Irish pension by that amount so they still only receive the top up


Its possible to claim state pension in more than 1 country in certain circumstanses.
Can claim full state pension in uk and ire in ltd circumstances. Otherwise maybe you are correct in that contribs in 1 country applies in another in claiming that countries pension.


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## Conan (27 Feb 2021)

Mikey9 said:


> I have 299 contributions Have you any idea of value ?


As stated earlier, you need a minimum of 520 PAID contributions to qualify for any State Pension. If less than 520 you get nothing.
The only exception would be the “Pro Rata Pension”. That’s where you retire from say a B of D class PRSI role that does not qualify for the State Pension (eg a pre 1995 Civil Servant) but you have some A class contributions from earlier in your career. In this case you need at least 260 PAID contributions to get a minimum pension.


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## Bronte (27 Feb 2021)

jim said:


> Its possible to claim state pension in more than 1 country in certain circumstanses.
> Can claim full state pension in uk and ire in ltd circumstances. Otherwise maybe you are correct in that contribs in 1 country applies in another in claiming that countries pension.


Yes it is true for my DH that his contributions in Ireland counted towards his pension entitlements to his current state pension. Not as regards amounts but as to eligibility as regards years.  Ireland has written to him to tell him he will receive an Irish pension in the future when he is old enough. That will be based on his service in Ireland.


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## Mikey9 (1 Mar 2021)

Conan said:


> As stated earlier, you need a minimum of 520 PAID contributions to qualify for any State Pension. If less than 520 you get nothing.
> The only exception would be the “Pro Rata Pension”. That’s where you retire from say a B of D class PRSI role that does not qualify for the State Pension (eg a pre 1995 Civil Servant) but you have some A class contributions from earlier in your career. In this case you need at least 260 PAID contributions to get a minimum pension.


I should qualify for A Pro Rata Pension as I had Class B contributions prior to retirement and have 299 ( between Class A and S) contributions since. If I increased this number beyond 350 would I get more than the minimun pension. Does the percentage increase if you have more contributions ?


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## Conan (1 Mar 2021)

Mikey9 said:


> I should qualify for A Pro Rata Pension as I had Class B contributions prior to retirement and have 299 ( between Class A and S) contributions since. If I increased this number beyond 350 would I get more than the minimun pension. Does the percentage increase if you have more contributions ?


I’m a little confused about your situation.
if you retired from a Class B job (not normally entitled to a State Pension) but have prior A Class contributions (minimum 260) then you may be entitled to a Pro Rata Pension. The calculation is as follows:
A Class contributions divided by total of all contributions (A plus B etc) x Full State Pension.
So for example if your prior A Class contributions were 299 and your total number of contributions (A + B ) were say 2080 (equivalent to 40 years), then your Pro Rata Pension would be 299/2080 x €248.30

Hope this clear.


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