# State Pension  (Transition)



## WindUp (18 Oct 2011)

Hi--Hopefully someone can help!

For a person turning 65 in April, who has enough paye employment contributions to get the State Pension Transition and has some self employment income I understand they can continue to earn approx €3k/5k from self employed income and still claim the pension.  I have 3 questions:

(1) Is earnings - income / taxable income / taxable income after capital allowances.

(2) Citizens information give the limit as €5,000 and SW use €3,174 -Which is correct?

(3) What period is used to determine the €3k - Jan to Dec in the year turning 65 (tax year); April 2012 to 2013 or both Jan to Dec 2012 and 2013 averaged.

I want to advise this person what they need to limit their earnings to and need to be 100% certain. 

Have tried citizens information (polite) and social welfare (exceptionally rude) and can't get a straight answer on any of the above!!!.

Anyone out there encounter this issue yet? I imagine there will be plenty in the same boat soon enough

Thanks 
W_U

PS 

this is for my father in law ! no room for error here


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## pudds (18 Oct 2011)

The state pension transition is *not* a means tested payment, however you can't work while on it but you can work when on the State Pension Contributory at age 66.

The State Pension (Transition) is paid to people aged 65 who have retired from work and who have enough social insurance contributions. It is not means-tested. In general, you must have been an employee and paying full-rate social insurance contributions, but a small number of self-employed people also qualify. 
  At age 66, you transfer to  State Pension (Contributory). You cannot work and get a State Pension (Transition). However, when you transfer to the the State Pension (Contributory) at age 66, you can work and get your pension.


http://www.welfare.ie/EN/Schemes/Pension/StatePensionTransition/Pages/spt.aspx


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## WindUp (18 Oct 2011)

Thanks Pudds -- but that is not my question! I know that is not means tested

The guidance says one of the conditions to qualify is that you must be *retired*
*"Note: a person is regarded as retired if in employment that is insurable at class J PRSI (i.e. earning less than 38.09 a week) or self-employed with earnings of less than 3,174.35 a year."*

The citizens' information site us 5k - I assume the 3174 is the correct number.
But what period is this "year" and what is "earnings"?

Now 3,174 is the amount above which self employed people must pay PRSI - so I 'm guessing that if there is a prsi liability in the "year" this must trigger  something between revenue & social welfare- but again what year (s):


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## pudds (19 Oct 2011)

Sorry WindUp I  mis understood your post.  Did you get to talk to an 'information officer' in social welfare as I would expect good advice there or at least a follow through. 

If you haven't all ready you could look through  the operational guide lines 
http://www.welfare.ie/EN/OperationalGuidelines/Pages/statpenstrans.aspx and see if there anything there that will clarify the points you raised. 

hope this helps!


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## WindUp (19 Oct 2011)

Thanks Pudds

No joy at all with SW- they were directing me to Revenue!!!

Nothing in the guidelines either.

I've submitted a query in writing to SW- hopefully i'll get a response
W_U


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## Black Sheep (19 Oct 2011)

The year in question is the tax year used by the claimant each year prior to the pension claim 

Assuming the person is self-employed and making a tax return each year to revenue, then that is the year used.  If for example the person is using Jan to Dec as his accounting/tax year and calculates his profits/losses up to the end of Dec. then that is the year he uses.

If on the other hand he uses say APR to March and calculates up to the end of march, then that's his tax year


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## TheBeach (19 Oct 2011)

Can only help with one part of your query:
The 3174euro amount refers to the amount a person can have as profit before becoming liable to pay Self Employed PRSI. This applies to earnings up to and including 2010yr.
This changes to 5000euro in 2011.
Hope this helps.


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## WindUp (19 Oct 2011)

Black Sheep said:


> The year in question is the tax year used by the claimant each year prior to the pension claim
> 
> Assuming the person is self-employed and making a tax return each year to revenue, then that is the year used.  If for example the person is using Jan to Dec as his accounting/tax year and calculates his profits/losses up to the end of Dec. then that is the year he uses.
> 
> If on the other hand he uses say APR to March and calculates up to the end of march, then that's his tax year



Thanks BlackSheep -- 

His Tax year is Jan to Dec 

So to be deemed retired and eligible for the transitional pension; He needs to ensure that his earnings for 2011 are less then €3,174? or is it €5,000 as TheBeach suggests

Can he earn more in 2012? 

Do you have a source for this? oh and what are earnings?

sorry for the questions - just need this to be 100%


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## WindUp (19 Oct 2011)

TheBeach said:


> Can only help with one part of your query:
> The 3174euro amount refers to the amount a person can have as profit before becoming liable to pay Self Employed PRSI. This applies to earnings up to and including 2010yr.
> This changes to 5000euro in 2011.
> Hope this helps.



Thanks a mil- i guessed it was if a person paid prsi they would essentially not be retired

I didn't realise it was changing in 2011 -- 5k after capital allowances is far more reasonable


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## Black Sheep (19 Oct 2011)

Both figures 3174 & 5,000 are mentioned on the SW website as the cut off points. Therefore it would be impossible to be 100% sure as they give conflicting figures in different sections of the same (SW) website


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## WindUp (19 Oct 2011)

Black Sheep said:


> Both figures 3174 & 5,000 are mentioned on the SW website as the cut off points. Therefore it would be impossible to be 100% sure as they give conflicting figures in different sections of the same (SW) website



 I know ! mad really

any source for the year used ?


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## Black Sheep (19 Oct 2011)

No source but from a simple logic point of view one has to continue to apply the same tax year as has been used for the previous years.


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## WindUp (20 Oct 2011)

Logic doesnt apply with social welfare! 
remember they will not see the 2011 earnings until November 2012 --- person will have been claiming transitional pension for 7 months at that stage --


also  --- should they not be allowed earn as much self employed income as the wish up until April when they turn 65? similar to a paye employee?


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## WindUp (21 Oct 2011)

Update - Meeting a social welfare officer to confirm what the answers to the above are - 


I'm going to ask another question here rather then starting another thread  ; and I'll ask SW as well but if anyone knows , great.

for the qualifying adult means test --- which is assessable in calculating weekly means? The current market Value of the shares or the dividend received from those shares annually?


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## Black Sheep (21 Oct 2011)

Current market value see below:-

*How we assess savings and investments of a qualified adult (QA)*

 When working out QA means from investments and savings, we add  together the following items that your spouse or partner may have and  use a special formula to work out their weekly means:


the cash value of investments and property (except your own home),
money in a savings account or any other kind of bank account, and
cash-in-hand.
                            Capital:              Weekly means assessed:                                First €20,000              Nil                                €20,000 - €30,000              €1 per €1,000                                €30,000 - €40,000              €2 per €1,000                                Over €40,000              €4 per €1,000


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## WindUp (21 Oct 2011)

great... Thanks Black Sheep


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