Entitlement to Irish State Pension?

[intermissionian]

I lived in Dublin in the early 2000s, leaving in 2012, and had accumulated 488 paid PRSI contributions at that point. I'm from Northern Ireland originally and am now working in the UK, with over 11 years of NI contributions made so far.

I expect to retire in the UK in the future (I'm 48 now). My understanding is that come retirement age I could potentially claim a state pension in each jurisdiction depending on contributions made in each country. However, I am currently short of the 520 minimum PRSI contributions to be entitled to claim the Irish state pension.

My understanding is that the only way for me to make up that shortfall would be to return to Ireland to work for a period of time (or work remotely for an Irish employer). Would that be correct? I don't believe I am entitled to pay voluntary contributions at this point.

Trying to read the rules and regulations around the CTA, Brexit etc as a layperson is not straightforward and it makes it a bit murkier trying to figure out how this will all work at retirement as I have read that the contributions made in both jurisdictions can be combined, e.g. Combining contributions
However, I phoned the pension hotline in the UK and asked if I could use my Irish PRSI contributions at retirement to enhance my UK state pension and they said no - that I would have to qualify separately in Ireland. So that advice is at odds with combining contributions. In any case I assume if you were going to combine contributions that would mean only claiming pension in one country.

So in trying to figure out what is best in order to maximise my state pension(s) - the only option I can see is as I mentioned, returning to Ireland for a while to make up the shortfall and get over the line on 520 paid PRSI contributions. Hopefully that would enable me to claim a partial pension in both places.

Is my understanding correct or are there any other options/considerations I haven't thought of?

 

[Marsupial]

I lived in Dublin in the early 2000s, leaving in 2012, and had accumulated 488 paid PRSI contributions at that point. I'm from Northern Ireland originally and am now working in the UK, with over 11 years of NI contributions made so far.

I expect to retire in the UK in the future (I'm 48 now). My understanding is that come retirement age I could potentially claim a state pension in each jurisdiction depending on contributions made in each country. However, I am currently short of the 520 minimum PRSI contributions to be entitled to claim the Irish state pension.

My understanding is that the only way for me to make up that shortfall would be to return to Ireland to work for a period of time (or work remotely for an Irish employer). Would that be correct? I don't believe I am entitled to pay voluntary contributions at this point.

Trying to read the rules and regulations around the CTA, Brexit etc as a layperson is not straightforward and it makes it a bit murkier trying to figure out how this will all work at retirement as I have read that the contributions made in both jurisdictions can be combined, e.g. Combining contributions
However, I phoned the pension hotline in the UK and asked if I could use my Irish PRSI contributions at retirement to enhance my UK state pension and they said no - that I would have to qualify separately in Ireland. So that advice is at odds with combining contributions. In any case I assume if you were going to combine contributions that would mean only claiming pension in one country.

So in trying to figure out what is best in order to maximise my state pension(s) - the only option I can see is as I mentioned, returning to Ireland for a while to make up the shortfall and get over the line on 520 paid PRSI contributions. Hopefully that would enable me to claim a partial pension in both places.

Is my understanding correct or are there any other options/considerations I haven't thought of?

The first thing to note is that the rules regarding the State Contributory Pension will almost certainly change before you reach pensionable age hence any interpretation of today's rules may well not apply in 20 years' time.

If you do not qualify for a State Pension Contributory based on your Irish social insurance contributions (and you don't) and you have periods of insurance in another EU or Bilateral Agreement country (e.g. the UK) then you may qualify for a pro-rata contributory pension using your combined social insurance records.
This pension is based on a combination of full-rate Irish social insurance contributions and reckonable social insurance in another country either an EU member or one with which Ireland has a Bilateral Social Security Agreement (e.g. the UK). The pension is a pro-rata payment based on the proportion of your Irish social insurance contributions to the total number of contributions paid and/or credited, that is, Irish and other insurance combined.

So if nothing changes, you would be eligible for both a small Irish pension plus your UK pension. With 488 reckonable Irish PRSI contributions, assuming that you don't make any more, I estimate that your pro rata Irish pension would be approximately 23% of the full rate.

 

[intermissionian]

Thank you Shirazman for your detailed response. I completely hear what you are saying about the rules changing before I reach pension age, and that definitely is a worry.

That is interesting that I would still get a pro-rata amount. I suppose my question becomes, based on todays rules, would it make a material difference if I made up the shortfall to get over the 520 contributions and qualify for the Irish pension independently of contributions made elsewhere? If I understand correctly, once over 520 contributions the 'normal average' rules could be used to calculate the pension, and since I would have over 10/year I think in todays terms that would equate to €106.00 / week or 41% of the €265.30 maximum? I'm basing that on 40years as I entered the insurance system at 26yo.

 

[Early Riser]

However, I phoned the pension hotline in the UK and asked if I could use my Irish PRSI contributions at retirement to enhance my UK state pension and they said no - that I would have to qualify separately in Ireland. So that advice is at odds with combining contributions

The Convention seems to state otherwise:


"This Convention shall apply:
......

(v) the following old-age benefit:
State Retirement Pension
...............

Where this Article applies, and unless otherwise provided by this Convention, a Party shall to the extent necessary take into account insurance periods, or periods of employment, self-employment or residence completed under the legislation of the other Party as though they were periods completed under its own legislation."

So if nothing changes, you would be eligible for both a small Irish pension plus your UK pension. With 488 reckonable Irish PRSI contributions, assuming that you don't make any more, I estimate that your pro rata Irish pension would be approximately 23% of the full rate.

Would this not mean using UK Social Insurance contributions for the UK pension and using the same ones (or some of them) to satisfy the conditions for the Irish Pension (Pro Rata calculation)? Is dual use of the same contributions allowed?

 

[Marsupial]

Would this not mean using UK Social Insurance contributions for the UK pension and using the same ones (or some of them) to satisfy the conditions for the Irish Pension (Pro Rata calculation)? Is dual use of the same contributions allowed?

That's one for the DSP, which is where I sourced my information.

 

[Early Riser]

That's one for the DSP

I think the answer would be "no". When applying for an EU/Bilateral pro rata pension you are expected to apply in the country of residence at the time. If this is Ireland then the Irish DSP corresponds with its UK (or other) counterpart and :

• If you have enough Irish social insurance contributions to get an Irish payment the Department will pay it and also initiate, on your behalf, a claim in the other country you worked in
• If you do not have enough social insurance contributions the Department will request your social insurance record from the other country to help you qualify for an Irish social insurance payment and also initiate, on your behalf, a claim in the other country that you have worked. This means you may get more than one payment; you may get an Irish payment and a payment from another country.

Combining social insurance contributions from abroad

Combining social insurance contributions paid in Ireland and abroad can help you qualify for a social welfare payment. Find out more.

www.citizensinformation.ie

For an Irish pension the applicant would need a minimum of 520 full PRSI contributions.
I assume the same process in reverse applies to an application made in the UK.

 

[Black Sheep]

I am assuming you have an official copy of your PRSI contributions record and not just your own calculation?

 

[twofor1]

I lived in Dublin in the early 2000s, leaving in 2012, and had accumulated 488 paid PRSI contributions at that point.
Are there any other options/considerations I haven't thought of?

When in your first year did you start working ? If it was late in the year it is possible you have enough Pre Entry Credits to bring you up to the required 520. PEC’s don’t appear on your contribution record but will be taken into account when your eligibility for a state pension is being considered.

https://www.citizensinformation.ie/... credits when you,2 previous income tax years.

 

[intermissionian]

I am assuming you have an official copy of your PRSI contributions record and not just your own calculation?

Hi Black Sheep, yes I do. I got the detailed breakdown, which shows the paid, credited, paid reckonable and credited reckonable contributions. I have 488 paid reckonable contributions, which I believe is the key one in terms of qualifying for the 520 threshold.

 

[intermissionian]

When in your first year did you start working ? If it was late in the year it is possible you have enough Pre Entry Credits to bring you up to the required 520. PEC’s don’t appear on your contribution record but will be taken into account when your eligibility for a state pension is being considered.

https://www.citizensinformation.ie/en/social-welfare/irish-social-welfare-system/social-insurance-prsi/credited-social-insurance-contributions/#:~:text=Pre-entry credits when you,2 previous income tax years.

Thanks twofor1, I was completely unaware of that. I started on 1st October 2001. 2001 was the short tax year, so in that case I may have PECs covering April - September that aren't shown on the statement? Interesting! I think that would be another 25 credits potentially.

 

[Marsupial]

That is interesting that I would still get a pro-rata amount. I suppose my question becomes, based on todays rules, would it make a material difference if I made up the shortfall to get over the 520 contributions and qualify for the Irish pension independently of contributions made elsewhere? If I understand correctly, once over 520 contributions the 'normal average' rules could be used to calculate the pension, and since I would have over 10/year I think in todays terms that would equate to €106.00 / week or 41% of the €265.30 maximum? I'm basing that on 40years as I entered the insurance system at 26yo.

The Minister for Social Protection announced last year that her intention is for the 'normal average' rules to be phased out over the next decade.

Even allowing for the inevitable slippage in introducing the proposed legislation, I think it's very unlikely that your contributory pension (assuming that you reach the required 520 contributions) would be calculated under that method but will instead be calculated on the Total Contribution Approach.

So the value of your contributory pension would be 520/2080ths of the full amount, or 25%.

Finally, and this is important - please note that pre-entry credits don't count towards the 520 PAID PRSI contributions that you need for contributory pension eligibility. They will come into play only after you have reached the threshold, not before!

 

[intermissionian]

The Minister for Social Protection announced last year that her intention is for the 'normal average' rules to be phased out over the next decade.

Even allowing for the inevitable slippage in introducing the proposed legislation, I think it's very unlikely that your contributory pension (assuming that you reach the required 520 contributions) would be calculated under that method but will instead be calculated on the Total Contribution Approach.

So the value of your contributory pension would be 520/2080ths of the full amount, or 25%.

Finally, and this is important - please note that pre-entry credits don't count towards the 520 PAID PRSI contributions that you need for contributory pension eligibility. They will come into play only after you have reached the threshold, not before!

Thank you Shirazman, this is all really useful info that I wasn't aware of & exactly what I hoped to get from this thread. Hadn't heard about that announcement from the Minister for Social Protection, so it is good to know that 'normal average' may not be around in the future.

I won't count on the pre-entry credits either, to get over the 520 line.

Thanks for taking the time to explain all of this.

 

[Early Riser]

please note that pre-entry credits don't count towards the 520 PAID PRSI contributions that you need for contributory pension eligibility. They will come into play only after you have reached the threshold, not before!

That seems in contradiction to the info on Citizens Information:

"Pre-entry credits can also help you qualify for the State Pension (Contributory). However, the credits will only cover you from the beginning of the tax year in which you start to work up to the actual date you start work."

 

[S class]

There is no contradiction. Shirazman is correct. No credits apply unless the rules for the minimum amount of paid contributions are met first. Once you have enough paid contributions then the pre entry credits might allow a person to qualify for a larger pension.

 

[Early Riser]

There is no contradiction. Shirazman is correct. No credits apply unless the rules for the minimum amount of paid contributions are met first. Once you have enough paid contributions then the pre entry credits might allow a person to qualify for a larger pension.

Thanks. But then the Citizens Information entry is poorly phrased.

 

[Marsupial]

Thanks. But then the Citizens Information entry is poorly phrased.

It is indeed. It is taken from the DSP Operational Instruction which is more detailed but probably needs to be read a couple of times before the full meaning is clear!