Is it worth paying voluntary UK NI contributions?

[Dave Vanian]

My wife worked in England for 13 years and paid National Insurance contributions there, which count towards the UK State Pension. Even though she lives in Ireland now, she can voluntarily pay National Insurance in the UK of an additional 17 years' contributions to bring her up to the maximum 30 years for a full UK pension.

She works in my business and pays Class M PRSI because she's married to the business owner. Class M PRSI doesn't qualify for the Irish State Pension. This never bothered me too much before because when we retire I can receive an increased State Pension for an adult dependent and the increase is almost as much as she would get for herself.

Two questions: -

(1) If she has a (full or partial) UK State Pension, does that mean she wouldn't qualify as an adult dependent of me for the purposes of the Irish State Pension?

(2) If she chooses to make UK National Insurance contributions, can these be claimed as pension contributions for tax purposes?

Thanks,

DV

 

[Black Sheep]

The QA portion of your pension is means tested, but the first E100.00 is disregarded. Therefore she could have income of 100.00 (from UK or other income) and receive the full QA rate.

Any income over that figure would reduce her payment on a sliding scale until it would be nil if she had income of 310.00

 

[Dave Vanian]

Thanks Black Sheep - very helpful.

She is currently contributing to a PRSA and the intention would be that this will be converted into an Approved Retirement Fund (ARF) and AMRF at retirement as I believe annuities to be poor value for money.

Do you happen to know if ARF and AMRF funds are treated as "capital" for the purposes of a means test? I know that savings are converted into weekly income for the calculation you mention above.

DV