Old Age Contributory Pension and Homemaker's Scheme

Hi
My wife is on a career break from the civil service to look after our children. She is doing some part time work and getting a PRSI contribution. (Not sure if any rules are being broken here). She is about to resign from the service. As I now understand it (Thanks to Clubman) she may be better off not working and qualifying for the Homemaker's Scheme.

I understand that to qualify for Old Age Contributory Pension, if you reach pension age on or after 6 April 2012:

You must have:
• started paying social insurance before reaching age 56 (This is the case)
• you must have paid at least 520 full-rate employment contributions. (This will be the case in a number of years time)
or
• if you have paid at least 260 full-rate employment contributions, you can make up the balance of the required 520 with high or special rate Voluntary Contributions.

and.

• a yearly average of at least 48 full-rate contributions paid or credited from 1979 to the end of the tax year before you reach age 66,
or
• a yearly average of at least 10 full rate contributions paid or credited from 1953 (or the time you started insurable employment, if later) to the end of the tax year before you reach age 66


(A yearly average of 10 full-rate contributions will give you the minimum rate of Old Age Contributory Pension. For the maximum pension, you need an average of 48 full-rate contributions.)

I have a few questions:

1. Is there a minimum number of contributions you need to be eligible for the Homemakers scheme.

2. Given that she started work as a civil servant in 1984 with Class B PRSI contributions and earned her first class A contributions in 2004, how will the average be calculated. She is now 41 years old. As she will be 66 in 2032, is it 2032 – 2004 or 2032 – 1984 as the number of years to be divided in to the total number of contributions make.

3. Is she better not working at all and get the year treated as a “home maker year” and so have it discounted from the averaging calculations.

4. Is there any obstacle to getting half a civil service pension and a Old Age Contributory Pension (or part of it)

1. No minimum, you can clock up the PRSI contributions after the Homemaking years

2. Class B are termed 'modified contributions' and they are counted in a 'mixed insurance' contributory pension which has the usual stipulations i.e. will still need 520 Class A contributions. There is then a pro rata downgrading of what she qualifies for depending on how many Class A contributions in total. Look at pg 23 of SW118 on the welfare site for the formula and a calculation example.

3. Homemaking years reduce the total that her contributions are averaged over - this will help for the 'pro rata ' formula but you'd probably have to sit down with a pen and paper to work out which is best - it maybe worth less than a euro !

4 There is no restrictions on the Contributory Pension once you are entitled to it no matter what other pensions/assets you have. Not sure if it's the same for the civil service pension.

Robo,

There is nothing stopping someone getting half civil service pension and half social welfare pension. In fact most public service pensions are now integrated with the social welfare pension (social welfare pension contributes towards meeting the half salary for someone with full service).

Wolfspeed