Combining Australian and Irish Pension Contributions

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Reni10

Registered User
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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
 
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
Click to expand...
You cannot combine your Irish and Australian contributions to achieve a full Irish pension. You will only get an Irish pro rata part pension and not the full Irish pension.
You may might be better off applying separately to the Irish and Australian pensions when you come up to the right age.

It is possible to make voluntary contributions in Ireland under certain conditions.

Pension age in Ireland is currently 66. It may might be even higher when you reach that age. Nobody knows what the future brings. You will be unable to draw down any Irish state pension before you reach pension age.

Take also note of the current changes in the Irish contributory pension system.


Voluntary social insurance contributions

Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.
www.citizensinformation.ie www.citizensinformation.ie

Operational Guidelines: State Pension Contributory

www.gov.ie www.gov.ie

Operational Guidelines: Application of Bilateral Agreements

www.gov.ie www.gov.ie
 
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.

On edit (because as a newbie I can't reply for two hours):

Formuser says:

"The link gives detailed information- down to links to the Australian pension authority:"

It does. And the links tends to align with my guess that Ireland recognises periods spent in Australia rather than contributions paid in Australia. At least, that's the Aussie view.

But what matters here is the view the DSP takes, and they way they apply this agreement in practice. The OP will evidently be seeking to have his Australian contributions/residence counted in claiming an Irish pension, so it's the DSP attitude that matters. Hopefully the DSP understandin is the same as the Centrelink understanding, and the text on the gov.ie website is just a ghastly mistake, but I think the OP should confirm this direclty with the DSP.
 
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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 www.gov.ie
Click to expand...
No- it does not say that you will get a full pension if you combine your Australian and Irish contributions. Surely you can combine all contributions- but each country will pay you only a pro rata pension- not a full one. Read the link again. There is even an example in it how it is done.
 
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.
Click to expand...


The link gives detailed information- down to links to the Australian pension authority:


https://www.servicesaustralia.gov.au/centrelink?context=22





Again- please study the links very carefully!
 
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I have emailed the dsp to try and get clarification as the doc I linked on the Irish gov website seems to state that periods of residence in Australia count towards the contribution calculations in Ireland for a state pension here if needed.

Anyone on here have actual experience of this with Australia in the past?
 
Reni10 said:
I have emailed the dsp to try and get clarification as the doc I linked on the Irish gov website seems to state that periods of residence in Australia count towards the contribution calculations in Ireland for a state pension here if needed.

Anyone on here have actual experience of this with Australia in the past?
Click to expand...
Good luck with the answer from the DoSP.
They won't tell you anything else than written in the links- if you get an answer.
You cannot just add all your Australian contributions to your Irish ones and expect a full Irish pension if you have the required 2080 contributions needed for a full Irish CP. The sum of your contributions gives you only the THEORETICAL pension you would be entitled to. The REAL pension will be the a proportional part of that theoretical pension. There are clear examples in the links provided. Have another look.
You cannot expect a country in which you only paid in a part of the required contributions to pay you a full pension. That is just wishful thinking. Alas reality is different.

I do not have any experience with combining Irish and Australian contributions. But I do have a lot of experience with combining Irish and EU contributions- and it does work the same way there as in the Irish-Australian accord.
 
So why is the Irish gov site saying because of the agreement with Australia you can add the Australian and Irish time to achieve the required contributions and receive the full cp pension?
 
Reni10 said:
So why is the Irish gov site saying because of the agreement with Australia you can add the Australian and Irish time to achieve the required contributions and receive the full cp pension?
Click to expand...
Read the links again. It is nowhere said that you receive a full Irish CP if you add enough Australian contributions to bring it up to 2080 contributions.
It says that you can get a "PROPORTIONAL PART" if you combine your contributions.

Please back up your post and do a "copy and paste" job to show us where the DoSP page says what you claim!
 
On this page:

Irish/Australian Social Security Agreement - SW87

An overview of the Social Security Agreement between Ireland and Australia.
www.gov.ie www.gov.ie
this is the only use of the word "full":
Guardian's Payment (Contributory), Bereavement Grant
Once entitlement to a Guardian's Payment (Contributory) or Bereavement Grant has been established either by virtue of Irish contributions alone or by a combination of Irish and Australian contributions, the full appropriate rate is payable.
Click to expand...
 
"appropriate" is what it says - whatever rate you qualify for based on your combined Irish and Australian record is then prorated by Irish / ( Irish + Australian ) so less than 100%
 
Contacted the DSP and they were useless, so I am none the wiser on this!

So can anyone explain then what I might be entitled to if I have 30 years worth of PRSI contributions and 10 years residence in Australia?
 
The PRSI requirements to get a pension in Ireland can be seen at this link:

Citizensinformation Source

Of interest to people with contributions in multiple jurisdictions is the following statement:

If you reach pension age on or after 6 April 2012, you need to have 520 full-rate PRSI contributions (10 years’ contributions).
Click to expand...

The primary point in the Irish/Australia social security agreement, and the same applies to most agreements with other countries, is:

Under the provisions of the Agreement, contributions paid in Australia can be used to satisfy the PRSI conditions for Irish payments.
Click to expand...

What this means is that if you do not have the full 10 years contributions in Ireland, you can use contributions made in other countries to ensure you meet the requirements for any payment at all from Ireland.

In other words, social security contributions made in the United Kingdom, Australia and many other countries can be used to make sure you meet the minimum requirement to receive an Irish payment - but WILL NOT increase the Irish payment received.

It doesn't offer you any benefit because you will meet the minimum 520 full-rate PRSI contributions anyway. It means that, if someone were to come from another country and pay 9 years PRSI contributions in Ireland, they will be able to use their contributions from that country (if an agreement exists with it) to ensure they meet the eligibility criteria to be entitled to an Irish pension. The rate of Irish pension they are entitled to will still be pro-rate, so will be 9/40ths of the full rate.
 
Reni10 said:
Contacted the DSP and they were useless, so I am none the wiser on this!

So can anyone explain then what I might be entitled to if I have 30 years worth of PRSI contributions and 10 years residence in Australia?
Click to expand...
So the DoSP just told you the obvious- and you did not like the answer....

Let's say it is now a good few years into the future. You are 66- and the retirement age is still at 66. By that time the pension calculation is done fully in TCA- the average system is long gone. 30 years of Irish PRSI contributions would give you 75% of the full pension. Let's say the rate of payment is still the same as today. Full rate is at the moment Euro 277.30. So 75% would give you Euro 207.98.
The DoSP will give you zero Euro for your 10 years in Australia-full stop! Otherwise it would be a bit like paying into a pension pot from Zurich and another one from Irish Life- and then expecting Zurich to pay for both pension pots in the end.
I do not know what the Australians will give you for the 10 years down under. I noticed that the Australian pension based on living in the country is means tested. It could very well be that the Australian pension office takes the Irish pension into consideration- and you end up with very little from them.
I have the suspicion that your insistence on getting paid for your Australian time by Ireland has something to do with the means test in Australia. Are you hoping to avoid this test through such a manoeuvre? It won't work for sure!
 
It would probably be something like
30 Irish years plus 10 Australian years gives you 40 years

So a full pension of 277.30 but ...
This would be pro-rated by 30/40 = 207.98
 
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