State pension contributions if over 6 years outside Ireland?

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Keithodub

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Hi. To anyone with a good working knowledge of this, an educated response would be much appreciated:
I've lived and worked in the UK for nearly 20years now but I was born & raised in Ireland and did work there for just shy of 15 years. Therein lies my problem. I'm about 12 contributions shy of a significantly better Irish state pension entitlement for when I retire. (My understanding is I can claim 2 state pensions - in Ireland and UK, neither of which will be full entitlements). I would like to know if I worked for let's say 2 weeks this year in Ireland for an Irish run and owned company (a friend's), would I be able to pay tax in Ireland using my old prsi number, and therefore would I also be able to make subsequent voluntary contributions off the back of that to get my contribution level up to the 15year "band"? Because I've been out of Ireland over 6 years and domiciled in UK for tax I don't know how this works? Thanks again!
 
The calculation system for the State Pension in Ireland is changing over the next few years, moving away from the “total and average “ system to a simpler Total Contribution Approach (TCA) by 2030. Under the TCA you will get 1/40th of a State Pension for each year of contribution (so 14/40ths with 14 years contribution).
You didn’t say when you will be 66, but assuming it’s around or after 2030, there will be no advantage in getting to “15 year band”.
 
@Keithodub

My reading of the rules is that you can work in Ireland for a week and have one paid PRSI contribution. After that you can make voluntary contributions PRSI until 65 for €500 a year if allowed (see more below).

Conan said:
You didn’t say when you will be 66, but assuming it’s around or after 2030, there will be no advantage in getting to “15 year band”.
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Yes but under the TCA more credits is always better, so why shouldn’t he try to accumulate more PRSI credits? (Maybe I’ve misunderstood you).

Finally bear in mind it is not clear that you can make voluntary PRSI contributions while still employed in the UK. Keep an eye on this thread.

Not allowed to contribute to Irish State Pension while living in the UK

I have just had a letter from Dept. Social Protection stating that I am not permitted to contribute to my Irish Pension while living in the UK as they say I am covered by social insurance in another EU country, but the UK is no longer a member of the EU, and I was under the impression that I...
www.askaboutmoney.com
 
Yes but under the TCA more credits is always better, so why shouldn’t he try to accumulate more PRSI credits? (Maybe I’ve misunderstood you).

Going from c14 years to 15 years (as originally suggested) would only increase the State Pension marginally - by 1/40th - assuming he will reach age 66 in or around 2030.
 
Conan said:
Going from c14 years to 15 years (as originally suggested) would only increase the State Pension marginally - by 1/40th - assuming he will reach age 66 in or around 2030.
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That’s €6.63 a week for life from age 66. Would you take that for a one-off cost of €500? I would.

I don’t see any downside to building up a PRSI record if he is entitled to do so.
 
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Thank you gents for your inputs. I didn't realise that change was happening. Another plan/notion foiled!!
So I'll be getting alot less than I would currently stand to if I turned state-pension age and got into that system before 2030. Sick of getting stung because of my age bracket at every turn by government changes on both sides of the water! I'm not state pension age until 2040. I'll do the maths but I don't honestly expect a long life beyond state pension age tbh so debatable if it'll be worth contributing if I am allowed! Thanks again.
 
Keithodub said:
Thank you gents for your inputs. I didn't realise that change was happening. Another plan/notion foiled!!
So I'll be getting alot less than I would currently stand to if I turned state-pension age and got into that system before 2030. Sick of getting stung because of my age bracket at every turn by government changes on both sides of the water! I'm not state pension age until 2040. I'll do the maths but I don't honestly expect a long life beyond state pension age tbh so debatable if it'll be worth contributing if I am allowed! Thanks again.
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Don’t know you state of health, but average life expectancy for a male retiring at 6( is almost 20 years and for women about 23 years. And those numbers are improving all the time.
 
I don't expect to drop down at 68,.. Health is generally fine but family history of heart issues etc I would be amazed to see 80. I am struggling to find what you've both said in print. Have you any links to the information please?
Disappointing news though! Basically whereas if I'd 15 years of full contributions I'd get €173 PW under current rules, I'd get just under €100 after the changes. A huge amount (about €50k) if I did live to 80!
 
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Keithodub said:
I don't expect to drop down at 68,.. Health is generally fine but family history of heart issues etc I would be amazed to see 80. I am struggling to find what you've both said in print. Have you any links to the information please?
Disappointing news though! Basically whereas if I'd 15 years of full contributions I'd get €173 PW under current rules, I'd get just under €100 after the changes. A huge amount (about €50k) if I did live to 80!
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The number of bands and corresponding payment rates has changed several times since state pension (contributory) was introduced in 1961.

Until the 1970s, a person with a yearly average of less than 24 had no state pension (contributory) entitlement.

Up to 1989, a person with a yearly average of less than 20 contributions did not qualify.

And then came the giveaway years when money grew on trees and "the economy was getting boomier" to quote a leading graduate of the LSE!

But now the grim reality of the growing pensions' time bomb has dawned on (some of) our politicians so they have decided it's time to throttle back.
 
Appreciate that Shirazman. But no more easy to swallow if you're the one affected by the catchment changes. In my case I've had several such things play to my disadvantage. This is just another. But appreciate the information. Cheers.
Still can't see any definitive plain-language text or example of the future state-pension pro-rata plans where entitlement is granted based on individual year's contributions ie 14/40th's in my case. The €500p/a voluntary contribution (if that's correct) could be worth the investment if I am to live on a few years past state age though. Will see!
 
Keithodub said:
Appreciate that Shirazman. But no more easy to swallow if you're the one affected by the catchment changes. In my case I've had several such things play to my disadvantage. This is just another. But appreciate the information. Cheers.
Still can't see any definitive plain-language text or example of the future state-pension pro-rata plans where entitlement is granted based on individual year's contributions ie 14/40th's in my case. The €500p/a voluntary contribution (if that's correct) could be worth the investment if I am to live on a few years past state age though. Will see!
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You're not affected by anything - yet!

And you may not be if a certain clueless political party gets into government after the next election and honours its populist promises not to do anything with the State Contributory pension! In fact, if I remember the spouted nonsense correctly, at one point, Big Mac promised to bring the pension age back down to 65 years of age. (But I'd advise voters to take that pledge with a very large grain of salt!)

As for you not having seen anything definitive, while I could point you in various directions, I suggest that you stay patient and wait until the Minister publishes the promised draft legislation. Only then will we be more certain of what is being proposed. My understanding is that she had planned to publish this in time for the October Budget, but it has slipped before and may slip again - especially if there's opposition from government backbenchers. (Anyway, who is to say whether the Ryan Tubridy/RTE crisis won't take priority in the minds of our lawmakers!)

As for the €500 voluntary Class S contribution, it's rumoured that this may be increased in the budget too. We sure do live in exciting times!
 
Shirazman said:
As for the €500 voluntary Class S contribution, it's rumoured that this may be increased in the budget too. We sure do live in exciting times!
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I haven't heard such a rumour but it would indeed make sense, the value of 1/40th of a state pension for €500 a year is unbelievable. It would still be good value at €5,000.

@Keithodub - in your shoes I would (a) seek written confirmation from DSP that you would be able to contribute PRSI on a voluntary basis in Ireland once you have some paid employment again, despite the fact that you are working in the UK; (b) start to make voluntary contributions again on that basis once confirmed. Keep an eye on the thread I linked to above in that regard.

Finally, if you are 50 now you still have 17 years of potential NI contributions in the UK and you only need 35 years for a full UK state pension. In a best case scenario you would get a full UK state pension and most of an Irish contributory one.
 
Thanks again folks. So it's not set in stone just as yet. I see. Thanks for clarifying. Though we all know things will get more stingy as opposed to generous. That's fair as something needs to be done. Just getting about 57% of what I was expecting from the Irish state feels harsh at the minute! And don't suppose there's any chance of them paying back in what they (illegally imo) took out of all our private pensions while they're on! I will watch this space. Big policy changes do have a habit of being delayed beyond elections alright! Regarding my UK entitlement I won't be working beyond hopefully 59 so won't have contributed 35yrs. The combo of 2x state pensions (assuming that's still allowed come the time - unlikely I know) should put me in a better place than either one on its own anyway. Thanks.
 
I don't live in the UK, but Germany. However, the 6 year rule did not apply to me as I claimed an entitlement to make VC1 contributions based on my ceasing insurable employment in another EU state, having made use of my right to freedom of movement after leaving Ireland. I had previously worked 13 years in Ireland before working a further 12 in Germany. The department accepted my application based on the fact I had left Ireland for another member state and continued working in insurable employment in that state. The 6 years was effective from the date I ceased insurable employment in Germany, not Ireland. Now Brexit has complicated that for the OP, but Ireland has bilateral social security agreements with the UK and we have the CTA between us. It would certainly be worth asking the department can voluntary contributions be made based on the above argument.
 
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