Combining social insurance contributions from abroad

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faketales

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I am trying to do a bit of early retirement planning (I'm 38). My understanding is that my pension will be calculated based on Total Contributions, needing 2,080 contributions (40 years).

I have approx 450 Irish contributions so far in Ireland and the same from working in Canada (I am trying to get this confirmed). That means will need to work for 22.7 years to get the full pension.

However as I will also be receiving one from Canada it seems by the below it will be prorated, lets say I do the 22.7 more years will my Irish pension then be (2,080-450)/2080 = 78% of max pension. Correct?

I will also have a Canadian Pension that will likely use its own calculation that I need to look into...

While not relevant to me I understand people have UK pensions in addition to Irish Pensions and not prorated?

Have I got this correct for as of now? Is there any online Calculator for this? Would Revenue (?) confirm this for me?

https://www.citizensinformation.ie/en/social-welfare/irish-social-welfare-system/claiming-a-social-welfare-payment/social-insurance-contributions-from-abroad/

How the rate of pension is calculated​

The rate of pension, where insurance contributions in another country are being combined with Irish contributions, is calculated as follows:

Step 1​

Your notional pension is calculated. Notional pension is the rate of Irish pension which would be payable if your social insurance contributions, both Irish and non-Irish, were treated as Irish contributions. To get the yearly average number of contributions, your Irish and non-Irish reckonable contributions are added together and the total is then divided by the number of years (this is, the number of years from your first paid social insurance contribution to the end of the tax year before reaching pension age (66).

Step 2​

The following formula is then applied:

(A x B)/C
  • A = the notional rate of pension (see step 1 to calculate the notional rate of pension)
  • B = the number of Irish contributions
  • C = the total number of contributions (Irish + non-Irish)
Note:
In the agreements with Austria, Australia, Canada, Quebec and UK, (as under EU legislation), where there are less than 52 contributions paid in the other country and a pension is not awarded by that country, the Irish pension is awarded on the sum of the 2 insurance records without the application of the pro-rata rule.
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Surely if you end up with the required 2080 contributions in Ireland, then you'd have the full pension, not 78% of it.
 
Lisgoold said:
Surely if you end up with the required 2080 contributions in Ireland, then you'd have the full pension, not 78% of it.
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It that example I don’t have the full 2080 in Ireland. But if I did I would have thought so.

However looking at the above formula it appears you divide the total Irish contribution but the total Irish plus non Irish.

Seems harsh. The principal seems to be that because you are also getting something from elsewhere the Irish pension would be reduced.

I guess the issue here is that the Irish pension isn’t something you “earn”.
 
My understanding is you get the value of your irish contributions pro rata. You get the value of your overseas contributions pro rata. This is the same for the UK except you can purchase additional contributions to boost the UK pension. Where you gain is that if you only had 5 years of irish contributions as long as you had 5 years in another eu or bilateral country you would get the 5 years worth. If you don't then you don't get anything for your 5 years. You are still young so plenty of time to get.
 
partnership said:
My understanding is you get the value of your irish contributions pro rata. You get the value of your overseas contributions pro rata. This is the same for the UK except you can purchase additional contributions to boost the UK pension. Where you gain is that if you only had 5 years of irish contributions as long as you had 5 years in another eu or bilateral country you would get the 5 years worth. If you don't then you don't get anything for your 5 years. You are still young so plenty of time to get.
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Why pro rata if I have all my Irish contributions?

I am not sure what Canada will give me yet. It may actually be more generous as they have Old Age Security and the Canada Pension Plan separate. My understanding is OAS is non contributory based and almost every one gets (paid out of general taxation). Where as CPP is based on actual contributions and funded by a pool of contributions invested.
 
faketales said:
Why pro rata if I have all my Irish contributions?

I am not sure what Canada will give me yet. It may actually be more generous as they have Old Age Security and the Canada Pension Plan separate. My understanding is OAS is non contributory based and almost every one gets (paid out of general taxation). Where as CPP is based on actual contributions and funded by a pool of contributions invested.
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You don't have to go for a pro rata Irish/Canadian pension when you have enough Irish contributions to fulfil the Irish conditions. Nobody is forcing you to go down that road.
As soon as you are over the 520 contribution line you can apply for an Irish- only CP pension.
I don't know anything about the Canadian pension system.
 
faketales said:
I am trying to do a bit of early retirement planning (I'm 38). My understanding is that my pension will be calculated based on Total Contributions, needing 2,080 contributions (40 years).

I have approx 450 Irish contributions so far in Ireland and the same from working in Canada (I am trying to get this confirmed). That means will need to work for 22.7 years to get the full pension.

However as I will also be receiving one from Canada it seems by the below it will be prorated, lets say I do the 22.7 more years will my Irish pension then be (2,080-450)/2080 = 78% of max pension. Correct?

I will also have a Canadian Pension that will likely use its own calculation that I need to look into...

While not relevant to me I understand people have UK pensions in addition to Irish Pensions and not prorated?

Have I got this correct for as of now? Is there any online Calculator for this? Would Revenue (?) confirm this for me?

https://www.citizensinformation.ie/en/social-welfare/irish-social-welfare-system/claiming-a-social-welfare-payment/social-insurance-contributions-from-abroad/
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I'm not sure where you get the 22.7 years from? That alone would give you 1180 contributions, plus you already have 450. Why do think the 450 are taken away from your total? Apologies if I'm being thick!
 
By pro rata I mean you get the percentage for which you have irish contributions. Ie if 10 years then 25% pension which is what you paid.
 
faketales, I think you are overthinking this.
You say you are aged 38, so that means you can work another 28 years (to age 66, the current State Pension age). That’s c1400 contributions. Add the 450 contributions you already have and that gives you c 1850 . Based on the Total Contribution Approach, 1850 gives you c89% Irish Pension.
In relation to your Canadian pension (I have no idea what that gives you), but under the Bi-Lateral Social Security Agreement, you can either:
- claim a small pension (I assume) from Canada (I don’t know whether they have any minimum contribution requirements), in addition to your 89% Irish Pension, or
- consult with the Dept of Social Welfare Records Office in Buncrana and seek to have your Canadian contributions transferred to your Irish history in order to improve your Irish Pension . In this case you would get a full Irish Pension.
 
And you can also defer taking your Irish Pension up to 70, this gives you the opportunity to earn another 4 years contributions and get a higher pension.
 
Forumuser said:
You don't have to go for a pro rata Irish/Canadian pension when you have enough Irish contributions to fulfil the Irish conditions. Nobody is forcing you to go down that road.
As soon as you are over the 520 contribution line you can apply for an Irish- only CP pension.
I don't know anything about the Canadian pension system.
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Interesting to note.
 
Conan said:
faketales, I think you are overthinking this.
You say you are aged 38, so that means you can work another 28 years (to age 66, the current State Pension age). That’s c1400 contributions. Add the 450 contributions you already have and that gives you c 1850 . Based on the Total Contribution Approach, 1850 gives you c89% Irish Pension.
In relation to your Canadian pension (I have no idea what that gives you), but under the Bi-Lateral Social Security Agreement, you can either:
- claim a small pension (I assume) from Canada (I don’t know whether they have any minimum contribution requirements), in addition to your 89% Irish Pension, or
- consult with the Dept of Social Welfare Records Office in Buncrana and seek to have your Canadian contributions transferred to your Irish history in order to improve your Irish Pension . In this case you would get a full Irish Pension.
Click to expand...

I will have to look at which gives me the most. Thanks
 
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