2 pension contributions short of qualifying for state pension ...options for overseas person

[ronaldo]

Am I missing something here? Why the suggestions to work in Ireland for 2 (or 22) weeks?

You can simply use UK National Insurance contributions to meet the minimum criteria to receive a state pension here. It will NOT increase your Irish state pension - just make sure you meet the social insurance contribution level to get it.

Assuming you are 2 weeks short of the 520 contributions needed, using a years National Insurance contributions will ensure that you meet the contribution level to receive an Irish state pension.

The state pension you will receive with 518 contributions would be 518/2080ths of the full amount, i.e. €72.05, using the Total Contributions Approach.

It would differ if using the average method, which is being phased out, and the amount would depend on how long you have until claiming it and when you earned your first PRSI contribution.

Do not make the mistake many make in believing that they'll get a full Irish pension based on 520 contributions. This was possible in the past if someones first PRSI contribution was precisely 10 years before retirement and they continued to contribute until retirement - using the average method.

 

[Dr Strangelove]

You can simply use UK National Insurance contributions to meet the minimum criteria to receive a state pension here. It will NOT increase your Irish state pension - just make sure you meet the social insurance contribution level to get it.

Wouldn’t that potentially reduce the UK state pension entitlement though?

 

[ronaldo]

Wouldn’t that potentially reduce the UK state pension entitlement though?

Possibly - if they don't have 35 years of contributions in the UK.

The majority of those hitting state pension age with less than 10 years of Irish contributions should have sufficient National Insurance contributions to have it make no difference sacrificing one.

Even for those that don't have 35 years in the UK, giving up 1/35th of the UK pension to receive a percentage of the Irish pension is a great deal assuming they've got more than a couple of years PRSI contributions.

 

[Dr Strangelove]

The majority of those hitting state pension age with less than 10 years of Irish contributions should have sufficient National Insurance contributions to have it make no difference sacrificing one.

Say you’re one year short of 10 in Ireland (9) and have one spare (36) in the UK.

That’s an uninterrupted social insurance contribution record of 45 years by age 66.

 

[ronaldo]

Say you’re one year short of 10 in Ireland (9) and have one spare (36) in the UK.

That’s an uninterrupted social insurance contribution record of 45 years by age 66.

This would result in your full 35 years being available to support a full UK state pension.

Your Irish record is 9 years which is short of the 10 required, but is made up by the 1 UK year. The 1 UK year allows you to meet the 10 year requirement for a pension, but doesn't add to the amount you'll receive - so you'd receive 9/40th of the Irish pension; not 10/40ths (the Irish one is based on 40 years whilst the UK is 35 years).

 

[robmccann]

I'm in a similar situation and have 480 Irish contributions but whenever I use any of the online calculators, the minimum requirement always appears to be 520. Or will this change using the Total Contributions Approach?

I'm also trying to work out if it's worthwhile at some stage in the future, gaining employment in Ireland for the purpose of meeting the minimum requirements for state pension. I also now work in the UK and expect to exceed the 35 years required for the full pension here. I will have 3-4 years to play with. I also read you cannot contribute to both social welfare systems at the same time, can anyone confirm that is the case?

 

[Thywillbedone]

To answer some of the questions above:

• It appears I have 498 reckonable contributions (not 518) ...I have 20 extra credited contributions which DON'T count towards the minimum 520 contributions needed to get basic state pension

• Assuming I get to 520 contributions, that would mean I have 10 years' worth of contributions ...as I understand it, when I then apply to get the Irish state pension, they would look at my UK contributions (assume 35 full years) and then give me 10/10+35 * Max State Pension ...so basically I would get 22% or so of the Irish state pension. Obviously still worth getting this as I earned it!

• Working in Ireland for a day or two is feasible but a longer stretch is not ...I have a youngish family so it would not work

• I am keen to get this resolved before the goalposts are moved - always a possibility when it comes to pensions!

• Re having a spare year in the UK, this is definitely do-able as I am self-employed ...but I am over 15 years away from UK state retirement age

To add: I don't believe qualifying for the Irish state pension would reduce my UK state pension at all assuming I have 35 full years here

 

[Thywillbedone]

I'm in a similar situation and have 480 Irish contributions but whenever I use any of the online calculators, the minimum requirement always appears to be 520. Or will this change using the Total Contributions Approach?

I'm also trying to work out if it's worthwhile at some stage in the future, gaining employment in Ireland for the purpose of meeting the minimum requirements for state pension. I also now work in the UK and expect to exceed the 35 years required for the full pension here. I will have 3-4 years to play with. I also read you cannot contribute to both social welfare systems at the same time, can anyone confirm that is the case?

If it's more than 5 years (I think) since you last paid into the Irish system, I believe that you can no longer make voluntary contributions to bump up your Irish record (if that's what you are asking) ...

 

[murphaph1]

If it's more than 5 years (I think) since you last paid into the Irish system, I believe that you can no longer make voluntary contributions to bump up your Irish record (if that's what you are asking) ...

This probably won't be the case if the insurance record was continued in another EU state (and indeed probably the UK even after Brexit). I stopped paying PRSI in 2008 when I moved to Germany and began paying the equivalent over here. Once I left employment in Germany a few years back and stopped paying social insurance (specifically pension) contributions, I contacted the dept. in Waterford and enquired about the possibility of paying voluntary PRSI in Ireland based on the principles of EU freedom of movement. The dept. readily agreed and accepted me as a voluntary contributor from the date of last pension contribution in Germany. I could have opted to pay voluntary contributions into the German system instead but the return is nowhere near as generous as in Ireland, paying a flat €500 a year for 1/40th of a pension. Sure it pays for itself less than 2 years after drawing down the pension. The widow's pension in Ireland is also significantly more generous than in Germany, so even if I don't make it to 68, my wife will benefit from the contributions.

 

[Dr Strangelove]

contacted the dept. in Waterford and enquired about the possibility of paying voluntary PRSI in Ireland based on the principles of EU freedom of movement. The dept. readily agreed and accepted me as a voluntary contributor from the date of last pension contribution in Germany.

That’s a lot more flexibility than the rules state.

Maybe deserves a thread of its own.

 

[ronaldo]

• Assuming I get to 520 contributions, that would mean I have 10 years' worth of contributions ...as I understand it, when I then apply to get the Irish state pension, they would look at my UK contributions (assume 35 full years) and then give me 10/10+35 * Max State Pension ...so basically I would get 22% or so of the Irish state pension. Obviously still worth getting this as I earned it!

They look at UK contributions to determine if you meet the minimum 520 (10 years) contributions required to get any state pension at all. However, they do not use these contributions to increase your Irish pension amount.

Basically, if you have 9 years in Ireland and are using 1 years worth of UK contributions to make up the 10 years to qualify, the actual amount payable is still based on the 9 years paid in Ireland. The 9 years would be valued at 9/40ths of the total; or 22.5%.

If you think about it logically, if excess UK National Insurance contributions increased the Irish pension payable, there'd likely be an influx of soon-to-be pensioners moving to Ireland, having amassed almost 50 years national insurance contributions, and gaining entitlement to almost 40% of the Irish state pension with their ~15 years excess national insurance contributions.

 

[Forumuser]

They look at UK contributions to determine if you meet the minimum 520 (10 years) contributions required to get any state pension at all. However, they do not use these contributions to increase your Irish pension amount.

Basically, if you have 9 years in Ireland and are using 1 years worth of UK contributions to make up the 10 years to qualify, the actual amount payable is still based on the 9 years paid in Ireland. The 9 years would be valued at 9/40ths of the total; or 22.5%.

If you think about it logically, if excess UK National Insurance contributions increased the Irish pension payable, there'd likely be an influx of soon-to-be pensioners moving to Ireland, having amassed almost 50 years national insurance contributions, and gaining entitlement to almost 40% of the Irish state pension with their ~15 years excess national insurance contributions.

You need to look closer at the method of how the Irish pension part is calculated.
In a pro rata pension- and that is the name of the pension we are talking about- the entire Irish contributions and entire UK contributions are added up- with special rules for the overlapping times. The Pension Office does not simply take one year of the UK contributions and add it to the 9 Irish years. It takes the lot into consideration. This means that the more UK contributions are in play, the less the Irish pro rata pension part will be. You probably won't get 9/40 or 22.5% of the full Irish pension- but less!

 

[Thywillbedone]

This probably won't be the case if the insurance record was continued in another EU state (and indeed probably the UK even after Brexit). I stopped paying PRSI in 2008 when I moved to Germany and began paying the equivalent over here. Once I left employment in Germany a few years back and stopped paying social insurance (specifically pension) contributions, I contacted the dept. in Waterford and enquired about the possibility of paying voluntary PRSI in Ireland based on the principles of EU freedom of movement. The dept. readily agreed and accepted me as a voluntary contributor from the date of last pension contribution in Germany. I could have opted to pay voluntary contributions into the German system instead but the return is nowhere near as generous as in Ireland, paying a flat €500 a year for 1/40th of a pension. Sure it pays for itself less than 2 years after drawing down the pension. The widow's pension in Ireland is also significantly more generous than in Germany, so even if I don't make it to 68, my wife will benefit from the contributions.

Very interesting! I will definitely explore that ...have opened a query with pensions team so once I get engagement with them I will see where this goes.

 

[Thywillbedone]

You need to look closer at the method of how the Irish pension part is calculated.
In a pro rata pension- and that is the name of the pension we are talking about- the entire Irish contributions and entire UK contributions are added up- with special rules for the overlapping times. The Pension Office does not simply take one year of the UK contributions and add it to the 9 Irish years. It takes the lot into consideration. This means that the more UK contributions are in play, the less the Irish pro rata pension part will be. You probably won't get 9/40 or 22.5% of the full Irish pension- but less!

You make this sound like it is somewhat arbitrary? The only calculcation I can find online (using my extensive ChatGPT skills!) is the below:

Pro-rata Pension = Irish contributions / Total Contributions in All Countries) × Maximum Irish Pension Rate

Assuming I have 10 years in Ireland (I don't yet) and 35 in the UK, I would get 22.2% of the max Irish State Pension (being 10/45). Unless there is another formula or rule I am not taking into account?

 

[Forumuser]

You make this sound like it is somewhat arbitrary? The only calculcation I can find online (using my extensive ChatGPT skills!) is the below:

Pro-rata Pension = Irish contributions / Total Contributions in All Countries) × Maximum Irish Pension Rate

Assuming I have 10 years in Ireland (I don't yet) and 35 in the UK, I would get 22.2% of the max Irish State Pension (being 10/45). Unless there is another formula or rule I am not taking into account?

The calculation method is correct. But your figures for both Ireland and the UK are so far only current projected figures and not what will be on the table when you make your pension application. You presume that you will have 9 years in Ireland and 35 years in the UK in 15 years time.
It is still a fact- which won't change- that the higher your UK contributions, the lower your Irish pension yield.
Adding one year of UK contributions to your Irish contributions will not bring the total Irish contributions up to 10 years. You will still have only 9 years of Irish contributions- unless, of course, you find some way to get 52 Irish PRSI contributions through work- but in that case there would be no need anymore for a pro rata pension since you would qualify in both countries for two separate pensions under each countries regulations. The UK year will only be used to bring you over the 520 contribution line which is required here in Ireland. It will be only used to show your qualification for the Irish Contributory Pension. It will NOT be used to boost your Irish part to 10 years! So your figure of "10/45" is wrong. Presuming that you end up with 9 years in Ireland and 35 years in the UK on the day of your pension application, you still have only "9/40" of the Irish pension.

Let's presume- just for the sake of the argument- it is now 15 years later. You have 35 UK years and 9 Irish years. The Irish pension would stand at Euro 500- and you would still need 40 years to get the full pension.

Means under the above conditions: Your notional pension rate under TCA would be Euro 500. Since you have only 9 years paid in Ireland, you will only get a pro rated pension.
Which is calculated in the following way: Notional rate multiplied by your Irish contributions and then divided through the sum of your UK and Irish contributions- as you stated correctly above:
500x468:2208. Which works out as Euro 105.98.
Based on a presumed pension rate of Euro 500 in 15 years time the figure of Euro 105.98 is only 21.19 % of the full pension- and not 22.5 %!

Try some calculations with a different UK pension age- which could be on the cards. 15 years is a long time- an eternity in politics. Pension age in the UK could be 70 then. This would mean your UK contributions would be 4 years higher than under your current projection. The weight of the UK contributions would drive down the value of your Irish contributions even further in a pro rata pension!

 

[Thywillbedone]

The calculation method is correct. But your figures for both Ireland and the UK are so far only current projected figures and not what will be on the table when you make your pension application. You presume that you will have 9 years in Ireland and 35 years in the UK in 15 years time.
It is still a fact- which won't change- that the higher your UK contributions, the lower your Irish pension yield.
Adding one year of UK contributions to your Irish contributions will not bring the total Irish contributions up to 10 years. You will still have only 9 years of Irish contributions- unless, of course, you find some way to get 52 Irish PRSI contributions through work- but in that case there would be no need anymore for a pro rata pension since you would qualify in both countries for two separate pensions under each countries regulations. The UK year will only be used to bring you over the 520 contribution line which is required here in Ireland. It will be only used to show your qualification for the Irish Contributory Pension. It will NOT be used to boost your Irish part to 10 years! So your figure of "10/45" is wrong. Presuming that you end up with 9 years in Ireland and 35 years in the UK on the day of your pension application, you still have only "9/40" of the Irish pension.

Let's presume- just for the sake of the argument- it is now 15 years later. You have 35 UK years and 9 Irish years. The Irish pension would stand at Euro 500- and you would still need 40 years to get the full pension.

Means under the above conditions: Your notional pension rate under TCA would be Euro 500. Since you have only 9 years paid in Ireland, you will only get a pro rated pension.
Which is calculated in the following way: Notional rate multiplied by your Irish contributions and then divided through the sum of your UK and Irish contributions- as you stated correctly above:
500x468:2208. Which works out as Euro 105.98.
Based on a presumed pension rate of Euro 500 in 15 years time the figure of Euro 105.98 is only 21.19 % of the full pension- and not 22.5 %!

Try some calculations with a different UK pension age- which could be on the cards. 15 years is a long time- an eternity in politics. Pension age in the UK could be 70 then. This would mean your UK contributions would be 4 years higher than under your current projection. The weight of the UK contributions would drive down the value of your Irish contributions even further in a pro rata pension!

My figures were based on hitting 10 Irish years and stopping at 35 UK years (which I have control over). Obviously the more Irish years I add (assuming an unchanged UK number of years), the larger my pro rata Irish pension will be.

 

[Forumuser]

My figures were based on hitting 10 Irish years and stopping at 35 UK years (which I have control over). Obviously the more Irish years I add (assuming an unchanged UK number of years), the larger my pro rata Irish pension will be.

That is correct. But you won't need any pro rata set up if you have 10 full years in Ireland. A combined contribution calculation would make no sense- you would be entitled to a full UK and 1/4 Irish pension without any aggregation. In this case the amount of UK contributions does not matter either- they won't drag your Irish pension down, no matter how many UK contributions you have.

I do not know how you can achieve the missing Irish year. You cannot use any voluntary contributions-even if the department gives you the permission to join the voluntary contribution scheme- based on your UK work history. You can use only paid contributions acquired through WORK. Anything else won't be accepted. I do not know how a mini job in Ireland- may be done via remote- would entitle you to any PRSI payments here in Ireland. You cannot be insured in two countries at the same time. There are specific rules for that.
If you insist on a pro rata pension- there could be reasons for that- you should not forget that you face the danger of overlapping. Working in the UK and having a mini job in Ireland would be of no benefit to you. Only the UK contributions would count in the aggregation process, the Irish ones would not qualify and you would waste your time.
Another possibility for you would be working in the UK until you have 35 full years- and then move to Ireland and work at least another full year to qualify for the missing Irish contributions. But that would be 15 years or so in the future and we do not know what regulations will be in force by that time.
You also need to examine if such a way would be really worth the trouble for the sake of a few more bob. Just accepting a pro rata pension based on a combination of your 9 Irish years and your 35 UK years would not be so bad at all, would it?

 

[Thywillbedone]

That is correct. But you won't need any pro rata set up if you have 10 full years in Ireland. A combined contribution calculation would make no sense- you would be entitled to a full UK and 1/4 Irish pension without any aggregation. In this case the amount of UK contributions does not matter either- they won't drag your Irish pension down, no matter how many UK contributions you have.

I do not know how you can achieve the missing Irish year. You cannot use any voluntary contributions-even if the department gives you the permission to join the voluntary contribution scheme- based on your UK work history. You can use only paid contributions acquired through WORK. Anything else won't be accepted. I do not know how a mini job in Ireland- may be done via remote- would entitle you to any PRSI payments here in Ireland. You cannot be insured in two countries at the same time. There are specific rules for that.
If you insist on a pro rata pension- there could be reasons for that- you should not forget that you face the danger of overlapping. Working in the UK and having a mini job in Ireland would be of no benefit to you. Only the UK contributions would count in the aggregation process, the Irish ones would not qualify and you would waste your time.
Another possibility for you would be working in the UK until you have 35 full years- and then move to Ireland and work at least another full year to qualify for the missing Irish contributions. But that would be 15 years or so in the future and we do not know what regulations will be in force by that time.
You also need to examine if such a way would be really worth the trouble for the sake of a few more bob. Just accepting a pro rata pension based on a combination of your 9 Irish years and your 35 UK years would not be so bad at all, would it?

Are you sure this is right? ChatGPT says the following:

"Ireland does not calculate pensions solely based on your contributions relative to its domestic maximum requirement of 40 years. Instead, EU rules take into account your total contributions across all countries and calculate your share based on the portion contributed in Ireland.

If you had contributed solely to Ireland (e.g., 10 years out of 40), then you'd receive 1/4 of the maximum Irish pension. But since international contributions are involved, the pro-rata method is used instead."

It seems that being short of the 10 years does not matter using the pro rata method (per ChatGPT: "With only 9 years of Irish contributions, you fall short of this threshold. However, EU aggregation rules allow you to combine your Irish and UK contributions to meet the minimum.".

My current expected entitlement would just be smaller e.g. 9 years (Ireland) + 35 yeards (UK) = 9/44 * max Irish pension = 20.5%.

I am going to see if there are any uncounted contributions from my teenage days and go from there as it would be nice to have the round 10 years.

 

[murphaph1]

Are there any potential circumstances where it would be more beneficial to use aggregation of contributions in two states even if the contributions in each individual state are sufficient to qualify for a standalone pension?

 

[Forumuser]

Are there any potential circumstances where it would be more beneficial to use aggregation of contributions in two states even if the contributions in each individual state are sufficient to qualify for a standalone pension?

Yes- there are. Since you are familiar with Germany, you would know what "innerstaatlich"and "zwischenstaatlich" means. One day your German pension will be calculated in both ways- and you will get the most beneficial payment as a pension.
The Germans will take your time spent in Ireland into account as well if they do a pro rata calculation. Not only the contributions- but also times spent on unemployment, illness, etc. This would bring your pension a little bit up- not much though.
The Irish side ignores all those times in their own pro rata calculations. It depends very much on the country and its own regulations if a pro rata or an independent pension gives you a better result.