Change of status credits

[november16]

Are you currently paying class S contributions ?

You will qualify for voluntary contributions because your combined class B, D and A contributions are over 520.

You could use up to 260 voluntary contributions to teach the 520 full rate paid level.

Are you currently in class D or B employment ?

You can back date voluntary contributions for up to 5 years.

If you have paid class S recently you can make voluntary contributions based on this for any of the last 5 years where you had no paid contributions or for any year where you had less than 52 paid contributions.

If you are not making class S contributions you could as you state get at least one class A contribution and make voluntary contributions based on this.

If you were in class B or D employment in any of the last 5 years you might not be able to get make voluntary contributions for the periods covered by the D or B contributions.

Is it possible for you to gain the extra paid contributions up to your 66th or 70th birthdays ?

Thanks very much S Class

*I’m still in D class employment presently..
*I am Not presently making S rate contributions.
I will need to look into this re maybe a PRSA if set up would that count? I Have small AVC so was maybe going to do ARF to generate the missing Prsi. If it all works out some not interested in short term ARF.

*I Was trying to fulfil the 3 additional years required ref eligibility for contributory pension, having approx 7 years presently. if I can make it to 10 years, at least to get partial contributory pension, that would make a big difference to a very moderate pension of 20,000 approx.
*My understanding of the guidance on gov.ie was you had to have 10 years Full Rate Prsi, before you are eligible to purchase Voluntary Prsi. So that would be great news if I can use the 260 for that possible option
*Therefore my combination of B. D.A. Prsi will count towards purchasing voluntary insurance, if I get A rate employment after finishing in public sector. This is where I get confused, and the uk voluntary state pension, would not interfere with this.?

*I am trying to look at all options eg ARF, voluntary contributions, temporary employment hedging my bets.
*Working up to 70 is a big reach for me age 64, disability related, even the A 1 P.R.S.I seeming difficult presently, having made enquiries, but will keep trying particularly if other options don’t work.

*I have also asked DSP on a few occasions to look into their “buckets” archives re some not substantial, missing social insurance payments, that I believe I may be entitled to and they say, they don’t have any record of Prsi prior to 1979…and directed me to Revenue, maybe as Prsi only started in 1979.

*The ARF option only seems to allow annual withdrawals of up to 15% with pension providers and requirement of a payment of 500 re Prsi would require €5000 withdrawal/ distribution for 3 years to make up to the minimum 10 years required for contributory pension.

*The ARF may be limited to approx €20,000 so this may not work. I have been advised it would not be a great plan..
*Maybe should have stuck with mixed rate pro rata and combined with 3 year uk but information re this was confusing and conflicting at the time.
*The public sector Pension may be a total of approx €20,000, difficult to get factual information from these people - nightmarish ongoing battle.

 

[S class]

I don't know anything about the UK contributions and how these can combine with Irish contributions.

Are you staying in the class D employment up to age 65 ?

My gut feeling is that you could not make backdated voluntary contributions for any period when you are in the class D system.
You could contact DSP to check if this is correct.

When you cease class D employment you will then have options to get you to the 520 full rate paid level.

You have enough Prsi contributions to allow you to be a voluntary contributor.

Pre 95 public sector workers and Prsi until age 70.

This category of workers may not be able to qualify for the contributory pension at age 66. If they don't qualify they will remain liable to Prsi on rental and investment income up to age 70. They will pay class K Prsi on their unearned income. This is charged at 4% and gives no reckonable...

www.askaboutmoney.com

Earn 38 euro in one week after you retire and you will get one class A contribution. You can then pay voluntary Prsi up to age 70. You can just remain as a voluntary contributor up to the time you reach the 520 full rate paid level if you like.

This one class A contribution also gets you change of status credits.

If you have sufficient AVCs after taking any extra available tax free lump sum you can set up an ARF.
You are short 3 years of paid Prsi, so 3 years of ARF drawdowns would get you to the 520 paid level without the need for extra employment or voluntary contributions.
An ARF of 20k would comfortably achieve this.
Don't worry about the 15% allowable ARF withdrawals.
You can ask the ARF provider to allow you to make a 5k withdrawal each year. I have previously advised a person to do this and Zurich agreed to this request.

Do you have any share dividends or bank deposit interest ?

If you do these earnings can be counted towards your 5k needed to gain 52 class S per year.

Say for instance you had bank deposit interest of 1k in a particular year. You would only need an ARF withdrawal of 4k in that year to get 52 class S.

Withdrawals from an ARF will cost less than voluntary contributions. Prsi on 5k from an ARF will cost 205 euro per year.
Voluntary Prsi based on class A contributions will cost 500 euro per year.

 

[Beeswax]

They should be class A for every week with earnings of 38 euro or more.

Having pension income doesn't alter this situation.

If an employer has applied class J, they should contact the employer to rectify

Thank you S class. Employer insists their return is accurate and advised to contact revenue.

 

[Beeswax]

hi, can I ask if the S cons from an Arf are considered reconable cons or does one need the 260 paid cons to qualify for scp. thanks in advance

 

[S class]

hi, can I ask if the S cons from an Arf are considered reconable cons or does one need the 260 paid cons to qualify for scp. thanks in advance

Class S from an ARF are Reckonable for SCP. They are equal to class A in this regard.

The required 260 paid cons can be any combination of class A and class S.

Is the employee you are referring to currently employed in Public Sector class B, C, D or H employment ?

Are they claiming the SCP ?

The 38 euro must relate to earnings in a single Prsi week period.
The work week for Prsi starts each tax year on the first day of the year. So for 2024 in starts on Mondays and ends on Sundays.

If the person for instance only worked on Sunday and earned 20 euro and then worked the next day, Monday, and earned 20 euro, they would not have earned over 38 euro in either of these two Prsi weeks and would be class J for each of these two weeks.

If they worked on Monday and Saturday they would be class A for one week.

Part-time work and social insurance (PRSI)

This page explains how part-time work can affect your PRSI contributions.

www.citizensinformation.ie

Providing they are earning 38 euro + in any single Prsi week they are entitled to class A.

These are the rules for class J employment.

"Class J applies to people earning less than €38 per week. However, people aged over 70 or people in subsidiary employment are always insurable at Class J, no matter how much they earn. Subsidiary employment for Class J is for example, people who are insurable at Class B, C, D or H in their main employment"

Assuming that the person is not in class B, C, D or H employment and under age 70 and not claiming the SCP they are entitled to class A on earnings of 38 euro + in a single Prsi week.

If the employer disagrees with this, report them to Revenue and Dept of Social Protection.

 

[Beeswax]

Class S from an ARF are Reckonable for SCP. They are equal to class A in this regard.

The required 260 paid cons can be any combination of class A and class S.

Is the employee you are referring to currently employed in Public Sector class B, C, D or H employment ?

Are they claiming the SCP ?

The 38 euro must relate to earnings in a single Prsi week period.
The work week for Prsi starts each tax year on the first day of the year. So for 2024 in starts on Mondays and ends on Sundays.

If the person for instance only worked on Sunday and earned 20 euro and then worked the next day, Monday, and earned 20 euro, they would not have earned over 38 euro in either of these two Prsi weeks and would be class J for each of these two weeks.

If they worked on Monday and Saturday they would be class A for one week.

Part-time work and social insurance (PRSI)

This page explains how part-time work can affect your PRSI contributions.

www.citizensinformation.ie

Providing they are earning 38 euro + in any single Prsi week they are entitled to class A.

These are the rules for class J employment.

"Class J applies to people earning less than €38 per week. However, people aged over 70 or people in subsidiary employment are always insurable at Class J, no matter how much they earn. Subsidiary employment for Class J is for example, people who are insurable at Class B, C, D or H in their main employment"

Assuming that the person is not in class B, C, D or H employment and under age 70 and not claiming the SCP they are entitled to class A on earnings of 38 euro + in a single Prsi week.

If the employer disagrees with this, report them to Revenue and Dept of Social Protection.

Thanks again S class. I will take your advice. earnings were for hours worked on a Mon. employee currently in receipt of PS pension 'M' cons.
If the S cons are same as class A - do they count for 65 benefit? thanks for your info. appreciated.

 

[S class]

If the S cons are same as class A - do they count for 65 benefit? thanks for your info. appreciated.

Getting class M from their pension doesn't alter the fact that they are entitled to class A on earnings of 38 euro per week.

Class S can count for 65s benefit, but there is a problem as there needs to be a ceasing of someform of self employment for this to work. In practice if a person doesn't have some sort of earned self employment that they are retiring from before age 65 the class S won't allow them to qualify for 65s benefit.

The only practical way for a PAYE retiree to qualify for 65s benefit is to use the class A rules.

That why I advise any PAYE retiree to sign on for Jobseekers credits until the end of the calendar year of their 63rd birthday.

The person you are referring to should ensure that they get a minimum of 39 contributions in the calendar year of their 63rd birthday. If there are gaps in their employment they should sign on for Jobseekers credits for the unemployed periods.

A person drawing down an ARF or paying voluntary Prsi is also allowed to be a Jobseeker and claim Jobseekers credits.

 

[november16]

I don't know anything about the UK contributions and how these can combine with Irish contributions.

Are you staying in the class D employment up to age 65 ?

My gut feeling is that you could not make backdated voluntary contributions for any period when you are in the class D system.
You could contact DSP to check if this is correct.

When you cease class D employment you will then have options to get you to the 520 full rate paid level.

You have enough Prsi contributions to allow you to be a voluntary contributor.

Pre 95 public sector workers and Prsi until age 70.

This category of workers may not be able to qualify for the contributory pension at age 66. If they don't qualify they will remain liable to Prsi on rental and investment income up to age 70. They will pay class K Prsi on their unearned income. This is charged at 4% and gives no reckonable...

www.askaboutmoney.com

Earn 38 euro in one week after you retire and you will get one class A contribution. You can then pay voluntary Prsi up to age 70. You can just remain as a voluntary contributor up to the time you reach the 520 full rate paid level if you like.

This one class A contribution also gets you change of status credits.

If you have sufficient AVCs after taking any extra available tax free lump sum you can set up an ARF.
You are short 3 years of paid Prsi, so 3 years of ARF drawdowns would get you to the 520 paid level without the need for extra employment or voluntary contributions.
An ARF of 20k would comfortably achieve this.
Don't worry about the 15% allowable ARF withdrawals.
You can ask the ARF provider to allow you to make a 5k withdrawal each year. I have previously advised a person to do this and Zurich agreed to this request.

Do you have any share dividends or bank deposit interest ?

If you do these earnings can be counted towards your 5k needed to gain 52 class S per year.

Say for instance you had bank deposit interest of 1k in a particular year. You would only need an ARF withdrawal of 4k in that year to get 52 class S.

Withdrawals from an ARF will cost less than voluntary contributions. Prsi on 5k from an ARF will cost 205 euro per year.
Voluntary Prsi based on class A contributions will cost 500 euro per year

Thanks very much S class I keep learning from your posts on options which will help in living on a fixed income.
* I would most lightly be unable to get to 65 unfortunately in the D PRSI position so trying to sort and line up what is required for the A or S social insurance for April approximately
*The A rate PRSI change from modified D is key to most options for me and thanks to your posts informing pre 95 ers particularly with less than 40 on our options.
*I will also be looking at ARF, which include deductions for Prsi, Tax USC to be paid on the ARF and good to know though re voluntary even if a more expensive route.
*Standard life looking at 30,000 minimum and early withdrawal fee if taken out before 5 years.
*I will look at Zurich Thanks very much.
*Dividends savings unfortunately not enough to reach the 5,000 minimum to pay PRSI but will look at combinations of ARF and possible savings Dividends if they apply very helpful to know I could combine.
*I have 32,000 with *New Ireland* as per Brokers will do lump sum for 2024 of €21, 000 approx before April if allowed and would like to move from brokers and new Ireland based upon my recent experiences.
*Will do re max lump sum revenue allowed on my salary .
*Pension and lump sum being worked out on 28.5 years m short 11.5 years and they are using a salary of €20,000 less than earnings to work out my final salary reduced final Salary due to the long term higher duty allowance not being pensioned ref 20,000
Full Salary not fully pensioned due to Long term higher duty not being superannuated.

Thanks very much S Class

*I’m still in D class employment presently..
*I am Not presently making S rate contributions.
I will need to look into this re maybe a PRSA if set up would that count? I Have small AVC so was maybe going to do ARF to generate the missing Prsi. If it all works out some not interested in short term ARF.

*I Was trying to fulfil the 3 additional years required ref eligibility for contributory pension, having approx 7 years presently. if I can make it to 10 years, at least to get partial contributory pension, that would make a big difference to a very moderate pension of 20,000 approx.
*My understanding of the guidance on gov.ie was you had to have 10 years Full Rate Prsi, before you are eligible to purchase Voluntary Prsi. So that would be great news if I can use the 260 for that possible option
*Therefore my combination of B. D.A. Prsi will count towards purchasing voluntary insurance, if I get A rate employment after finishing in public sector. This is where I get confused, and the uk voluntary state pension, would not interfere with this.?

*I am trying to look at all options eg ARF, voluntary contributions, temporary employment hedging my bets.
*Working up to 70 is a big reach for me age 64, disability related, even the A 1 P.R.S.I seeming difficult presently, having made enquiries, but will keep trying particularly if other options don’t work.

*I have also asked DSP on a few occasions to look into their “buckets” archives re some not substantial, missing social insurance payments, that I believe I may be entitled to and they say, they don’t have any record of Prsi prior to 1979…and directed me to Revenue, maybe as Prsi only started in 1979.

*The ARF option only seems to allow annual withdrawals of up to 15% with pension providers and requirement of a payment of 500 re Prsi would require €5000 withdrawal/ distribution for 3 years to make up to the minimum 10 years required for contributory pension.

*The ARF may be limited to approx €20,000 so this may not work. I have been advised it would not be a great plan..
*Maybe should have stuck with mixed rate pro rata and combined with 3 year uk but information re this was confusing and conflicting at the time.
*The public sector Pension may be a total of approx €20,000, difficult to get factual information from these people - nightmarish ongoing battle.

 

[november16]

Thanks very much S class I keep learning from your posts on options which will help in living on a fixed income.
* I would most lightly be unable to get to 65 unfortunately in the D PRSI position so trying to sort and line up what is required for the A or S social insurance for April approximately
*The A rate PRSI change from modified D is key to most options for me and thanks to your posts informing pre 95 ers particularly with less than 40 on our options.
*I will also be looking at ARF, which include deductions for Prsi, Tax USC to be paid on the ARF and good to know though re voluntary even if a more expensive route.
*Standard life looking at 30,000 minimum and early withdrawal fee if taken out before 5 years.
*I will look at Zurich Thanks very much.
*Dividends savings unfortunately not enough to reach the 5,000 minimum to pay PRSI but will look at combinations of ARF and possible savings Dividends if they apply very helpful to know I could combine.
*I have 32,000 with *New Ireland* as per Brokers will do lump sum for 2024 of €21, 000 approx before April if allowed and would like to move from brokers and new Ireland based upon my recent experiences.
*Will do re max lump sum revenue allowed on my salary .
*Pension and lump sum being worked out on 28.5 years m short 11.5 years and they are using a salary of €20,000 less than earnings to work out my final salary reduced final Salary due to the long term higher duty allowance not being pensioned ref 20,000
Full Salary not fully pensioned due to Long term higher duty not being superannuated.

 

[S class]

Check out Irish Life. A few years ago they were opening ARFs as low as 10k.
Zurich are minimum 20k. But they are flexible on opening an ARF below this amount.

 

[Joebloggs]

Hello and Happy New Year to all.

May I please ask your advice on the best way forward to try and achieve a Partial State Contributory Pension.

Retired early this year from Public Service. Paid a D stamp for over 33 years.

Have 52 A stamps from a job before joining the P.S. in the early 80's. Worked for a week this year after retiring so have attained an A stamp for 2024. I intend to apply to Social Welfare (have yet to figure out how to do this!) for a Change of Status Credits for 2023 + 2024.

This will, I believe, then give me 3 years of A Stamps. Would these 3 years then be reckonable for State Pension purposes ?

I have an AVC, the first drawdown will be in December 2025 of at least €5,000 in order to give me 52 S stamps in 2025.

My question is If I continue to drawdown AVC of at least €5,000 over 7 years, will this qualify me for a Partial Contributory Old Age Pension coupled with my 1 year of A stamps + 2 Years of Change of Status Credits for 2023 & 2024.


If not, could I achieve my goal of trying to get a Partial State Contributory Pension by other means, eg Voluntary Contributions or working for a few weeks every year in an A stamp job ?

Thank you very much for your advices and if you can guide me in the right direction.

 

[S class]

You don't need to apply for change of status credits. They are added automatically when your contributory pension is calculated.

The extra change of status credits are reckonable for the contributory pension.

Yes, you will get 52 reckonable paid prsi contributions for each of the 7 years you drawdown 5k from your ARF.

You will then have 8 years of full rate paid contributions and 2 years of credited contributions.

With these you will qualify for a pro rata contributory pension.

You would need a total of 10 years full rate paid contributions to get a contributory pension calculated using the total contributions method.

Are the 7 years of ARF drawdowns taking you up to age 70 ?

Did you work in Ireland or abroad or get any Jobseekers credits in the period from the early eighties until your PS employment start date ?

Contact Social Welfare and apply to sign on for Jobseekers credits to keep the option for qualifying for Benefit Payment 65 open.

 

[Beeswax]

Getting class M from their pension doesn't alter the fact that they are entitled to class A on earnings of 38 euro per week.

Class S can count for 65s benefit, but there is a problem as there needs to be a ceasing of someform of self employment for this to work. In practice if a person doesn't have some sort of earned self employment that they are retiring from before age 65 the class S won't allow them to qualify for 65s benefit.

The only practical way for a PAYE retiree to qualify for 65s benefit is to use the class A rules.

That why I advise any PAYE retiree to sign on for Jobseekers credits until the end of the calendar year of their 63rd birthday.

The person you are referring to should ensure that they get a minimum of 39 contributions in the calendar year of their 63rd birthday. If there are gaps in their employment they should sign on for Jobseekers credits for the unemployed periods.

A person drawing down an ARF or paying voluntary Prsi is also allowed to be a Jobseeker and claim Jobseekers credits.

ok thanks again appreciate all the info S class.

 

[Joebloggs]

You don't need to apply for change of status credits. They are added automatically when your contributory pension is calculated.

The extra change of status credits are reckonable for the contributory pension.

Yes, you will get 52 reckonable paid prsi contributions for each of the 7 years you drawdown 5k from your ARF.

You will then have 8 years of full rate paid contributions and 2 years of credited contributions.

With these you will qualify for a pro rata contributory pension.

You would need a total of 10 years full rate paid contributions to get a contributory pension calculated using the total contributions method.

Are the 7 years of ARF drawdowns taking you up to age 70 ?

Did you work in Ireland or abroad or get any Jobseekers credits in the period from the early eighties until your PS employment start date ?

Contact Social Welfare and apply to sign on for Jobseekers credits to keep the option for qualifying for Benefit Payment 65 open.

Thank you very much S Class for your reply.

In answer to your questions, I have appx €50k in my ARF. If I make a €5,000 + withdrawal over the next 7 years, I will then be 67 and should have achieved 8 years fully paid and 2 years credited contributions. From your advices above, if I understand it correctly, I could then apply for a Pro Rata Contributory Pension and receive something.

Unfortunately I have no jobseekers credits and neither did I work abroad.

Should I still apply for Jobseekers Credits based on the above do you think ?

Many thanks for your assistance.

 

[S class]

@Joebloggs

Yes definitely claim Jobseekers credits in order to allow you to qualify for Benefit Payment 65.

If you have a minimum of 39 Prsi contributions in the calendar year of your 63rd birthday (these can be Jobseekers credits), you then only need to have 13 paid class A Prsi contributions (get employment for at least 38 euro per week for 13 weeks to get these) in any one of the following years. The calendar year of your 61st, 62nd, 63rd, 64th or 65th birthdays.

You should aim to get 520 full rate paid contributions (10 years).
If you reach this level you will get a larger pension calculated using the total contributions method.

You could easily reach this level if you can manage to get 9 years of 5k drawdowns from your ARF.

If your ARF becomes depleted and does not allow 9 years of drawdowns, you could then make voluntary contributions based on your class S contributions to get you to the 520 full rate paid contributions level.

You would have to deferr your contributory pension until age 69, but you would then get a substantial amount of extra pension payments.

You would need to work out exactly how much extra you would gain per week and calculate how many years it would take you to break even.

If you are in good health at age 67 it would probably be beneficial for you to deferr to 69 for the extra weekly pension.

Also to add more complications.
You can apply for a pro rata pension when you have 260 full rate contributions. You could reach this level after 4 years of ARF drawdowns.

So you also have the option to get a pro rata pension from age 66 if you choose. This pension would be less than what you would achieve at age 67 or 69.

P.S. Have you checked your Prsi record ?

You might have some Reckonable Prsi contributions from your pre establishment period.

It could also be beneficial for you to fill in the rest of 2024 with full rate paid contributions. You could do this by making voluntary contributions for 2024 based on your class A contributions.

This could allow you to reach the 520 fully paid contributions level at an earlier age and allow you to claim a pension calculated using the total contributions method, at a younger age.

You have lots of opportunities. It's a lot to try and get your head around but well worth the effort.

 

[Joebloggs]

Thank you so much S Class for this very valuable information. You are a gem !

Yes it is a lot to get my head around but you have given me a few options with varying time scales to achieve my goal of trying to obtain some State Contributory Old Age Pension.

 

[Beeswax]

Getting class M from their pension doesn't alter the fact that they are entitled to class A on earnings of 38 euro per week.

Class S can count for 65s benefit, but there is a problem as there needs to be a ceasing of someform of self employment for this to work. In practice if a person doesn't have some sort of earned self employment that they are retiring from before age 65 the class S won't allow them to qualify for 65s benefit.

The only practical way for a PAYE retiree to qualify for 65s benefit is to use the class A rules.

That why I advise any PAYE retiree to sign on for Jobseekers credits until the end of the calendar year of their 63rd birthday.

The person you are referring to should ensure that they get a minimum of 39 contributions in the calendar year of their 63rd birthday. If there are gaps in their employment they should sign on for Jobseekers credits for the unemployed periods.

A person drawing down an ARF or paying voluntary Prsi is also allowed to be a Jobseeker and claim Jobseekers credits.

S class - just to recap - If I had 160A paid cons prior to PS employment (now on PS pension recently retired) there is no necessity to work to get A cons if I can obtain S cons from an Arf or do I still need the 260 paid contributions to qualify in the first instance? Many thanks again.

 

[S class]

No need to work.

The class S contributions are exactly the same as class A for qualification for the Contributory pension.

So to clarify you can use your ARF class S to add to your existing 160 paid contributions in order to reach the 260 paid contributions level.

After 2 years of ARF drawdowns you will have 264 paid contributions.

Happy new year !

 

[Beeswax]

Happy new year to you too and thanks for all the info

 

[S class]

If the S cons are same as class A - do they count for 65 benefit?

Just some more clarification on this.

The class S from an ARF could be used to meet the...

First Contribution Condition

"A person must have at least 104 reckonable contributions paid since they entered insurable employment payable at Classes A, H and P or 156 self-employment contributions paid at Class S."

So at age 65....
If the person doesn't have at least 104 class A paid contributions
They will meet the First contribution condition if they have at least 156 Class S contributions.

So Class S from their ARF could be useful here.


However the class S from their ARF won't allow them to meet the...

Second Contribution Condition

They would need paid and credited class A contributions to meet the second contribution condition.

The person you are referring to should ensure that they get a minimum of 39 contributions in the calendar year of their 63rd birthday.

They then just need 13 paid class A contributions from employment in any one of the following years.

The calendar year of their 61st, 62nd, 63rd, 64th or 65th birthdays.


These rules are difficult to follow and I frequently get confused with them myself.

Hopefully you are understanding what I am saying.

These are the guidelines if you want to check them out.

Operational Guidelines: Benefit Payment for 65 Year Olds

www.gov.ie