Combining Australian and Irish Pension Contributions

Reni10 said:

I am looking to retire in about 7 years time in 2031 at 55 and will have paid about 24 years worth of contributions in Ireland when I have worked here and also contributions in Australia for 10 years.

I have now been based back in Ireland for the last 12 years and would be looking to retire either in some other EU or Asian country and want to maximise my potential pension so I have a few questions which hopefully members here can help with:

1. I believe I can combine my Irish and Australian contributions when it comes to the State Contributory Pension in Ireland to make up the 40 years worth of PRSI needed to get the full Irish pension?

2. As I plan to stop working at 55 and if I can combine the Australian contributions I will need to make voluntary contributions of about 6 years to get me to the full 40years worth of PRSI payments.
How much per year voluntary PRSI payments will I need to make?

3. Is there any pitfalls that people have come across with combining Australian and Irish contributions that I need to be aware of?

Thanks all

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Reni10 said:

According to this gov document I can combine my Irish and Australian contributions to get a full pension???

Irish/Australian Social Security Agreement - SW87

An overview of the Social Security Agreement between Ireland and Australia.

www.gov.ie

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TomEdison said:

There is no social security/social welfare contribution system in Australia. The OP has not paid social insurance contributions in Australia, because no worker does. The age pension, as it’s called, in Australia is not based on any contribution record or employment history; it is based purely on a residence test and a means test (which means that some workers get no age pension in retirement, because they do not satisfy the means test).

(Australia does have a system of compulsory retirement saving. Contributions will have been paid on the OP’s behalf by their employers, and the OP may have paid contributions themselves. But this is not a social security benefit and the contributions are not social insurance contributions; they are paid to an investment provider and accumulated in a fund for the benefit of the employee. The accumulated value of the contributions paid by the OP should be available to them, but they are not social insurance contributions and can’t be aggregated with Irish social insurance contributions.)

What about the Ireland/Australia Social Security Agreement? Well, the text linked by the OP is mystifying to me. It talks about contributions paid in Australia being used to satisfy PRSI contribution requirements but, as noted, no social insurance contributions are paid in Australia. This looks to me like bog-standard text that the DSP uses to describe all its bilateral social security agreements — text that is appropriate in the context of most other countries (because most countries do operate a contribution-based social security system) but that is inappropriate to the Australian context.

So how does the IRL/AUS social security agreement work? Damned if I know; the OP will need to ask the DSP. But here’s a wild guess as to how it might work:

As mentioned, the Australian age pension involves a residence test. You have to be resident when claiming and receiving the pension, but in order to qualify for the pension you also have to have been resident for a minimum period (I think at least 10 years) before you claim. And possibly, just possibly, the social security agreement means that, for this purpose, periods during which you were paying PRSI in Ireland can be counted as if they were periods of Australian residence. And, conversely, when it comes to claiming social insurance benefits in Ireland, periods during which the OP was resident in Australia (and of working age) can be counted as if the OP was paying PRSI contributions during those periods.

That’s just a guess. The OP needs to approach the DSP to find out how the social security agreement works, because the text on the gov.ie website is certainly not how it works.

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