Change of status credits

[Meath Lady]

Asking for a friend:

Friend retired from public service this year age 60 with approx 30 years at class D contributions.
Friend currently holds 160 paid A contributions from past employment and would like to become eligible for some state contributory pension going forward.

I know she needs 260 contributions along with her D cons to be eligible for a mixed rate pension.
She is currently seeking part time employment.
Does she need to find work before her D contributions can be converted.

Does she have to have earned A contributions before year end to be eligible
How many D cons can be converted.

Does she have to request this conversion now or at pension age.
She spoke to someone in Social Protection who had no knowledge of change of status credits.

Any help welcome

 

[S class]

She needs at least one paid class A contribution to get change of status credits.

The rules for change of status credits are that when the change of status occurs all modified contributions for that year and the previous year are changed to reckonable credits.

So if she gets 1 paid A contribution before the end of 2024 her class D contributions for 2024 and 2023 will convert to Reckonable credits.

She doesn't have to request the change of status credits they are automatically applied when she applies for the Contributory Pension.

They don't ever appear on a person's Prsi record. So she need not worry about not seeing them before claiming the Contributory Pension.

I had change of status credits applied when I claimed my Contributory Pension.

I ceased PS employment on 31 December in my retirement year.
I did not get class A employment until half way through the following year.

I had expected to just receive change of status credits for my retirement year.

However I ended up also getting change of status credits to fill the approximately 6 months gap when I had no Prsi contributions in the year after retirement.

It seems that change of status credits are granted for any modified contributions and gaps in the year when the change of status occurs.

Ideally she should aim for at least one paid class A this year.

If continuing in part time work is difficult for her she could, after getting at least 1 class A contribution, then pay voluntary contributions based on her class A Prsi.

After she finishes class A employment she should sign on for Jobseekers credits.

Especially so if she ceases employment before the end of the calendar year of her 63rd birthday.

This is usefull if she wants to qualify for Benefit Payment 65.

 

[Meath Lady]

Thank you so much for all this information S Class. It is greatly appreciated.

 

[Marsupial]

Could Class S please comment on the following real-life situation:

Year 1 . Resigned teaching job in August and didn't work for remainder of year. PRSI record shows 36 weeks of paid Class D.

Year 2. Employed as a substitute teacher for 2 months. PRSI record shows 9 weeks of paid Class A PRSI ---> Change of PRSI Status.
Also corrected Leaving Cert scripts for the State Examinations Commission; PRSI record shows 4 weeks of Class J.
No other employment during that year.

I had assumed that her change of status credits would mean that she would get an extra 16 weeks of Class A credits for year 1, and
39 weeks of Class A credits for year 2.

However, if I'm reading your post correctly, it appears that:

For YEAR 1: her record will be revised to show 36 paid Class A weeks and 16 Class A credits.
For YEAR 2: her Class J contributions will be changed to paid Class A contributions, and her 39 gap weeks will become Class A credits.

I appreciate that you're not the Deciding Officer in DSP, but do you think that my revised calculations are in accordance with your understanding of the CoS calculations, please.

 

[S class]

Did she earn less than 38 euro per week for the 4 weeks she corrected exam papers ?
Only earnings of less than 38 euro would be class J.

Class J applies to exam supervisors but no mention of exam paper correctors.

"attendants at Department of Education and Skills examinations"

If she earned over 38 euro per week she probably should be class A.

Correcting exam papers is not attendance at an exam.

Change of status credits only apply to class B , C or D.


Class J applies to class B or D employees doing extra jobs.
So a teacher still employed at either of these classes would be class J for the corrections.

A teacher employed at class A should be class A for corrections.
An unemployed teacher should also be class A for corrections.

I am not certain about this but it seems logical.

 

[Marsupial]

Did she earn less than 38 euro per week for the 4 weeks she corrected exam papers ?
Only earnings of less than 38 euro would be class J.

She would have earned a lot more than that for correcting 3 to 400 exam scripts!

However, Class J rate applies to

• attendants at Department of Education and Skills examinations.

and I suspect that she may have been (wrongly) classified under this category. She probably should have been regarded as a Class K PRSI payer, as occurred in other years, but either way, it's a non-reckonable PRSI Class so really shouldn't affect things.

 

[S class]

• class K also applies to the additional earned self-employed income from a trade or profession of a modified rate contributor and on any unearned income they have

Class J
people insurable at Class B, C, D or H in their main employment and who have a second job.

Is correcting exam papers regarded as self employment ?

If so then class K would have applied when she was a class D employee.

As a self employed person she would be class S on over 5000 euro earnings.after she ceased class D employment.

Does a person with earned self employment under 5000 euro pay no Prsi ?
Or do they pay class K.
I don't know the answer to this one.

In the year after I retired and paid 2 class A contributions I also had 52 class K contributions from investment income.

These 52 class K did not prevent me from gaining 50 change of status credits for that year.

I reckon that your wife should be either class S or K or not liable for Prsi for her 4 weeks of exam correction. Definitely not class J.

 

[S class]

Having written these replies I am now wondering if I am correct in assuming that a gap in Reckonable contributions in the year after I retired was actually filled in or were my class K contributions given change of status to Reckonable contributions.

 

[Marsupial]

Did she earn less than 38 euro per week for the 4 weeks she corrected exam papers ?
Only earnings of less than 38 euro would be class J.

Class J applies to exam supervisors but no mention of exam paper correctors.

I know!

"attendants at Department of Education and Skills examinations"

If she earned over 38 euro per week she probably should be class A.

I've been around the houses with this! I raised the matter with SCOPE section in 2013 and got a written decision (backdated to 2005) that said that she was liable for Class S if her earnings were over the then threshold of €3,174 (increasing to €5000 in 2011) and if not, Class M/K applied!

Correcting exam papers is not attendance at an exam.

Yes , I worked that out all by myself!

Change of status credits only apply to class B , C or D.

Exactly, so it's probably best to treat the Class J aspect as being a distraction and concentrate on the change from Class D PRSI in YEAR 1 to Class A PRSI in Year 2?

 

[S class]

I had a look at my Contributory pension awarded letter. It lists all reckonable Prsi.
I retired on 31st December 2013.
The tables in the award letter show 52 reckonable credits for 2013.
This is straightforward 52 class D given change of status.

For 2014 the table shows 2 paid contributions and 50 reckonable credits.
2 paid are straightforward. 2weeks of PAYE employment.
I signed on for Jobseekers credits roughly half way through the year so approximately 26 of the credits are Jobseekers credits, all straightforward.

The unknown factor is the remaining 24 credits.
For this period I had class K from investment income and a gap in my record for any other Prsi.

The rules state that change of status credits only apply to class B, C, or D Prsi.

Going by the rules I am inclined to think that it was a case of filling in a gap rather than changing the status of class K contributions.

But if they changed class K to Reckonable contributions, then class J might also be changed.

When you wife gets her pension calculation I would be very interested to see how her change of status is applied.

 

[S class]

I've been around the houses with this! I raised the matter with SCOPE section in 2013 and got a written decision (backdated to 2005) that said that she was liable for Class S if her earnings were over the then threshold of €3,174 (increasing to €5000 in 2011) and if not, Class M/K applied!

This is confirmation that correcting exam papers is classed as self employment.
It is definitely not class J.

 

[S class]

She will definitely get 36 weeks of change of status in year 1.
She definitely has 9 paid contributions in year 2.
Beyond that it's guesswork.

Maybe some other pre 95 retirees might be able to throw some light on the situation.

 

[Marsupial]

This is confirmation that correcting exam papers is classed as self employment.
It is definitely not class J.

Agreed. But, as her income wasn't sufficient for her to pay Class S, and the alternative Classes (K or M) are both non-reckonable for pension purposes, I decided not to fight that battle. (Life's too short!)

 

[partnership]

She needs at least one paid class A contribution to get change of status credits.

The rules for change of status credits are that when the change of status occurs all modified contributions for that year and the previous year are changed to reckonable credits.

So if she gets 1 paid A contribution before the end of 2024 her class D contributions for 2024 and 2023 will convert to Reckonable credits.

She doesn't have to request the change of status credits they are automatically applied when she applies for the Contributory Pension.

They don't ever appear on a person's Prsi record. So she need not worry about not seeing them before claiming the Contributory Pension.

I had change of status credits applied when I claimed my Contributory Pension.

I ceased PS employment on 31 December in my retirement year.
I did not get class A employment until half way through the following year.

I had expected to just receive change of status credits for my retirement year.

However I ended up also getting change of status credits to fill the approximately 6 months gap when I had no Prsi contributions in the year after retirement.

It seems that change of status credits are granted for any modified contributions and gaps in the year when the change of status occurs.

Ideally she should aim for at least one paid class A this year.

If continuing in part time work is difficult for her she could, after getting at least 1 class A contribution, then pay voluntary contributions based on her class A Prsi.

After she finishes class A employment she should sign on for Jobseekers credits.

Especially so if she ceases employment before the end of the calendar year of her 63rd birthday.

This is usefull if she wants to qualify for Benefit Payment 65.

Hi S Class do the change of status credits count towards the 520 needed to get a partial pension?

 

[S class]

Hi S Class do the change of status credits count towards the 520 needed to get a partial pension?

No.

Only full rate paid contributions count. Class S or Class A.
If you are pre 95 you can use your class B of D contributions to meet the rules to have 520 paid contributions to qualify for voluntary Prs.

Voluntary Prsi based on having at least one class A contribution after ceasing class B or D employment will count towards the 520 paid contributions to qualify for a partial pension.