Not paying the €500 self employed prsi?

Quick question if anyone knows the answer.

If stay at home parent claiming child benefit has a small home based business, too small to need to pay prsi, but should they still avail of the option to pay the miminum €500? Are they covered for state pension by the Homemakers scheme in that case at all?

Logic tells me they shouldn't be as they are technically working even though still at home and minding the children the child benefit is for. If they no longer qualify under the Homemakers then it would be pretty much essential to pay the minimum contribution, yes?

good question, I'd be interested also. If they're not still covered by the Homemakers scheme, it's a serious disincentive to working part-time.

EDIT - actually you can

• Not work full-time, however, you can work and earn less than €38 gross per week

source: http://www.citizensinformation.ie/e.../social_insurance_prsi/homemakers_scheme.html

38 per week is the threshold at which you must be registered for PRSI - you still don't have to pay anything yourself if your earnings are below 352 per week; however this seems to be for employees, assuming the employer is paying something. It's not clear how it works for the self-employed.

Yes I found that info too, hard to imagine what part time work you could do that would get you less than €38 gross per week!

worth noting, if you're a married couple the homemaker may* qualify as a dependent of the main earner. The difference between the full contributory pension and the amount for a qualified dependent is only €25, so 1 years voluntary PRSI of €500 would take you 20 years to recoup...

also if you don't have the average 48 weeks contributions, the next band down is only €5 per week less, & it covers everyone with average 20 weeks contributions or more, so your voluntary €500 would take 100 years to recoup

*(the means test is based on the income of the dependant, so if they have their own private pension they may not qualify, but presumably they'd have been paying PRSI anyway in that case).

obviously these figures/differentials may change in the future, though any changes to the PRSI contribution rules are unlikely to be retrospective (there'd be political war).

Assuming there is a main earner still around come pension time

shweeney said:

worth noting, if you're a married couple the homemaker may* qualify as a dependent of the main earner. The difference between the full contributory pension and the amount for a qualified dependent is only €25, so 1 years voluntary PRSI of €500 would take you 20 years to recoup...

also if you don't have the average 48 weeks contributions, the next band down is only €5 per week less, & it covers everyone with average 20 weeks contributions or more, so your voluntary €500 would take 100 years to recoup

Click to expand...

OK I'm an idiot who can't tell the difference between years and weeks

€5 per week difference is 250 per year so you'd recoup a year's PRSI payment every 2 years. But it's still not a huge amount of money, so it's possibly not worth the hassle. If you're earning so little that you're not paying PRSI, that €500 may be worth more to you now.

I did wonder about the maths!

It's not for me, I've done my years and have about 38 yrs of full contributions at this stage so basically qualified but I was asked the question by someone else and was just wondering.