How can I maximise my contributory old age pension?

rum and black

Registered User
Messages
51
posted previously with another question so going to post as a separate question.

My partner worked in the public service from circa 1976 to 1987 and paid a class D contribution. She then stayed at home looking after the children apart from a small amount of work during which she got about 25 A contributions. The youngest turned 12 in early 2002. Partner retrained and took up work from August 2004 until June 2005 paying an A contribution. Between June 2005 and April 2006 partner worked intermittently and signed on when not working. She received no money but was awarded credits during unemployment weeks.
In April 2006 she became fully employed and still is, and has paid an A contribution each week since April 2006. However she is finding her work mentally draining and very stressful and is unsure how long more she can continue. She is now 62. Her earliest retirement age from her job is 65 but pension wont kick in until 2024 when she is 67.
We have joint rental income on which PRSI is paid each year. Is any of this PRSI counted towards Pension contributions as I didn't notice any contributions when she got her records from the Department of Social Protection. Can they be used to enhance her entitlement to pension or if not and she leaves work should she make voluntary contributions to maximize her pension. How much would this voluntary contribution be . I think I saw somewhere that it was 500 euro per year which would be 500 x 5 which is manageable ,or is it a percentage of rental income and if so any idea what percent and will this help her with her old age contributory pension. Thanks
 
Is your partner not entitled to her public sector pension already at 60? It should be 11/80ths of final salary.
 
Last edited:
Yes. I would have thought she should have been claiming her pension from her Class D public service fron 60.
She took an early retirement/redundancy package back then and yes I omitted to say she does have a small pension from that which she has since about 1987. What she wants to establish is how to maximise her A contribution for a full or as near to full Contributory Pension. I think this was answered in another thread indicating that she can sign for credits which we weren't aware she could do.
 
In April 2006 she became fully employed and still is, and has paid an A contribution each week since April 2006. However she is finding her work mentally draining and very stressful and is unsure how long more she can continue. She is now 62. Her earliest retirement age from her job is 65 but pension wont kick in until 2024 when she is 67.

Your wife has a number of options (assuming she is in a public service job).

She can work until 65 and get her pension from her current job. She can also then claim Jobseekers Benefit which, after 65, is for up to 12 months - up to 66. She will get Class A credits during this. Currently, at least, there are no credits available beyond 66.

She could also retire anytime from now with a preserved pension, ie, it won't be paid until 65.

She could also retire anytime on a Cost Neutral basis, ie, the pension will be paid immediately but at an actuarially reduced level.

On either of the latter options she could also apply for Jobseekers Benefit. The actual criteria don't change after 62 (available for and seeking work) but what does change is enforcement or "activation". At most, she is likely to be denied the first 6 weeks of her claim.

While on Jobseekers she will get PRSI Class A credits. When the claim runs out (after 9 months before 65) she can remain signed on for credits.

What she can't do is just retire and sign for credits. She must first submit a claim for Jobseekers (or other benefit, if eligible).
 
Last edited:
Back again. Wife still working but struggling in this current pandemic. As she now has only 20 months until she is 65 what is the advantage if any of preserving pension as opposed to taking cost neutral early retirement. Her pension is combined with her social welfare pension ,and is only in the region of 2200 euro with approximately 3500 supplementary. I understand supplementary cannot be accessed until 65 and only if refused social welfare. If she retires now at 63.3 years and choses cost neutral she will get 88.5% of approximately 2200. If she retires now and leaves pension until she is 65 will she get 2200 per year going forward. I know its not a big difference either way but wondering.?

On another note. If she retires now and chooses not to apply for job seekers as not technically looking for work again or signing for credits after job seekers can her rental income on which prsi is paid help towards state pension . She only has about 16 years of A contributions so would like to maximise this if possible.
Alternatively is she opts for voluntary contributions would this be based on pension and rental income and at what percentage. I guess she would only pay this until she reaches 66.
If anyone had a contact in social welfare or could point me in the direction of exactly where to find these answers I would be grateful. I am aware that at the moment some factors have not been decided going forward for contributory pension.
 
I understand supplementary cannot be accessed until 65 and only if refused social welfare. If she retires now at 63.3 years and choses cost neutral she will get 88.5% of approximately 2200. If she retires now and leaves pension until she is 65 will she get 2200 per year going forward. I know its not a big difference either way but wondering.?

If €2,200 is her Occ Pension then if she retires now with a preserved pension she gets this at 65 and going forward. If she takes CNER now she will get the reduced rate immediately and going forward for life (along with any small increases that may arise later linked to the salary for her current position). At 63 the reduction is to 88.5% of the preserved pension rate, while at 64 it is 94%. Anywhere in between it is pro-rated proportionately. As you say, the difference is small right now but may be more important for her in the longer term.

If she retired now she could claim JB for 9 months and get credits while doing so. If she delayed slightly and retired at 64ish this would bring her almost to 65, from when she could get the Supplementary until State Pension age. Whichever age she retires at (and whether CNER, Preserved Pension or normal retirement at 65) she will have to apply for JB anyhow before becoming eligible for the Supplementary. And JB is considerable higher than the Suppplementary rate you indicate she qualifies for.

If she retires now and chooses not to apply for job seekers as not technically looking for work again or signing for credits after job seekers can her rental income on which prsi is paid help towards state pension
Yes, as far as I know Class S PRSI on rental income counts towards the State Pension in the same way as Class A - subject to a minimum yearly payment of €500 on Class S. If her contribution from her rental income should be less than this I understand she can top it up to €500 on a voluntary basis. There is no PRSI on her pension income.
 
Thank you that is really helpful and good to know either way one must apply for Jobseekers. Neither of us have ever had reason to claim Social welfare so that's why she wasn't keen.

As it stands I can see the amount of PRSI chargeable on my self assessment tax return for 2019 for spouse is 1657 euro. (rental related) This does not include her PRSI paid from her employment which is about 330 euro per year also
Do you have any idea if there would be any reason this did not show up on her social welfare record back the years . Would it be because she had class A and previously class M. If you can point me in the direction to find out that would be great. Although some of those years may be negated by homemakers. Its all a minefield.
Thanks again for your help.
 
Back
Top