Key Post PRSI and planning retirement

Dopey1 said:

2019 they have me down as 52k which is not correct,

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The rules for class K are very convoluted.
Check out here to see if you should be class K or class S.


Post in thread 'PRSI and planning retirement'

POC said:

There are errors on my contribution statement too. I sent an email to that email address on Jan 31st and haven't received a reply of any sort (yet).

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I replied a couple of times before they took action.

So if somebody was drawing down an ARF before they were 63 they would qualify for the 65 year old payment by that alone?

mmclo said:

So if somebody was drawing down an ARF before they were 63 they would qualify for the 65 year old payment by that alone?

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I don't think so. When I looked into this it seems that the Class S PRSI contributions on the ARF income are not sufficient to meet the qualification criteria. I'm sure that @S class can explain more clearly...

Edit:

...
(Preceding qualifying criteria...)

And

• Have paid or credited at least 39 PRSI contributions at Class A, H or P in the Governing Contribution Year (a minimum of 13 weeks must be paid contributions*). If you don't have 39 PRSI contributions in the Governing Contribution Year, you can use 26 PRSI contributions paid in the governing contribution year and 26 paid in the year immediately before this.

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@mmclo
The only way to qualify using only class S contributions is to have ceased an earned self employment no earlier than the beginning of the calendar year of your 63rd birthday.

You would need to set up and cease a new self employment before your 65th birthday in order to qualify.

Otherwise you can qualify under the class A rules. If you are age 63 or under you could still qualify. If you are 63 this year you need to act fast to get a minimum of 39 class A credits or paid contributions for this year.

You can be in receipt of class S contributions and sign on to claim Jobseekers credits. You could get employment to gain 1 class A contribution and then sign on.

Provided you gain a minimum of 39 Jobseekers credits during the calendar year of your 63rd birthday, you then only need 13 weeks of paid class A contributions, in any one calender year, from age 61 up to 65.


From Operational guidelines for benefit payment 65.

"Self-employed contributors who have lost their usual self-employed occupation and who are in receipt of an Approved Retirement Fund, ARF, as defined by section 784A of the Taxes Consolidation Act 1997, may be eligible for BP65 in certain circumstances.

• the person has sustained the loss of self-employment in their usual occupation. A person’s usual occupation is one where the type of work a person ordinarily performs for most of the time is by virtue of experience and/or training and is within a particular field of work
• and the loss of the usual self-employment occurred since the beginning of the second last complete calendar year before the year in which the application is made. For example, in order to qualify for a claim made in 2025, the applicant’s usual self-employed business must have closed on or after 01 January 2023. If the usual business closed before this date, JBSE and consequently BP65 is not payable"

On using Class S contributions to help qualify for State Contributory Pension

Scenario:
- A person in Class D employment, who also has AVCs, decides to retire in October (month of their birthday)
- An ARF is taken out using the AVC fund
- The person draws down 5000e in Nov or Dec of the same year

Will this gain 52 Class S 'stamps' or just 1 ?

I don't know what would happen in that situation.
People paying modified contributions cannot get Class S from self employment while they are still in the modified employment.

This might mean that they would only get the class S for the part of the year after the modified employment ceases.

Without any class D they would definitely get 52 class S from a 5k ARF drawdown in Nov or Dec.

You won't know for sure until you get your Prsi record for that year.

What is certain is that you will not get change of status credits based on the class S contributions.

If possible try to get 1 class A contribution after you cease the modified employment. This will guarantee that you will get Reckonable credits for your full final year and the previous year.

Then sign on for Jobseekers Credits and remain signing on up to age 66. This will assist you to qualify for BP 65.

You are allowed to receive class S contributions and sign on for Jobseekers credits at the same time.

Keep all possible options open.

Provided you gain a minimum of 39 Jobseekers credits during the calendar year of your 63rd birthday, you then only need 13 weeks of paid class A contributions, in any one calender year, from age 61 up to 65.

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Think I follow, I was thinking of the Class S from the ARF but this seems to just be technically self employment due to how the income comes about

So one way to maximize PRSI contributions for the 2080 and get the 65 year old payment if one wanted to "retire" early would be;

- start to draw ARF at 61 (starting far enough in to the year to ensure 16 class A contributions from the job you will be leaving)
- sign on for jobseekers credits (or even payment??) at the same time (assuming you don't go over 520 credits for pension qualification between this and 66)
- officially be available for work of course
- qualify for the 65 year old payment on the basis of the 16 class A and 39 credits in your 63rd year
- get state pension at 66

I think as was said before the ARF and 65 payment are really "twin tracks" which is a good way to think of it

??

@mmclo

Yes that's a good plan.

Going over 520 credits won't interfere with qualifying for BP 65.
The 520 credits limit only applies to Reckonable contributions for the COAP.

With your 13 paid class A in the year of your 61st birthday, you only need at least 39 Jobseekers credits in the year of your 63rd birthday. No paid class A contributions are necessary in that year.

At all times it's the calendar year of your birthdays that count.
For example say your 61st birthday is in December.
You could work the first 13 weeks of that year (you are still aged 60) and then retire. These 13 paid class A at age 60 will count towards qualifying for BP 65.

@sclass Thanks, what a grasp of this stuff you have!

I'll copy and paste that as my outline plan

As long as world economy doesn't collapse and the UK stays solvent

mmclo said:

sign on for jobseekers credits (or even payment??)

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I missed this bit.

Yes definitely claim Jobseekers payments and when the payments end, then sign on for credits.

I am in the habit of saying sign on for credits because I was in class D employment when I retired and only qualified for credits.

And getting payment for the 9 months would not impact on anything else in that plan? Suspect might work a bit when the time comes but it's interesting to model the different options

mmclo said:

And getting payment for the 9 months would not impact on anything else in that plan?

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Claiming Jobseekers Benefit won't impact anything.
If you want to maximise your position, you can claim 9 months JB and then get employment for 13 weeks and then cease the employment and then requalify for another 9 months of JB.

outofmymind said:

14. For someone retiring early, particularly pre-95 public sector employees taking early retirement, they may not have a full pension from their employment, and paid Class D for many years. Can they top this up to gain some Contributory pension by having with other reckonable Class A or Class S contributions?

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I am in the above category. I want to get to the 520 paid contributions .I would be grateful if someone could clarify eligibility requirements.
I retired in October 2024,aged 58 with 35 years paid D class. I have 48 A class contributions. I wanted to make voluntary contributions from next birthday April for 2 years (59 to 61 ) ..I have an ARF of 33000 and will draw down the 5100 euro to get a further 312 s class stamps. I was hoping to start withdrawing ARF at age 61. Should I drawdowm immediately to be able to avail of paid voluntary contributios to make up the shortfall ?
I worked to earn an A stamp before end of October to avail of change of status for 2024/2023 (92weeks). I signed on for credits in November but signed off in January as i am currently working parttime to earn a further 10 A class stamps.I will not be available for work after Easter as I plan to take up full time study.
Class A paid 48 +2 + 10 ( previous service + 2 weeks post retirement to change status + 10 weeks subbing from end Jan to April )
Change of Status 92
Class S 312
Voluntary 100
Total 564 Is this an accurate calculation or am I completely off ?
1.When I calculate the total reckonable contributions can I include the change of status credits?
2.Am I eligible to make voluntary paid contributions at present or is there a requirement to have a 260 minimum of paid a or sn class ?
3. Does signing on for credits contributr to total in any way?
4.Are pre entry credits available . None were on my contributions statement fom Dept Of social protection.

1. Change of status credits cannot be counted towards the 520 full rate paid target.

2. You might be eligible to pay voluntary contributions immediately. Check this out with DSP. Voluntary contributions will only be Reckonable if you achieve 260 full rate paid (class A and S) contributions. You could achieve this target.

3. Keep signing on for credits to fill in any gaps in your class A employment. Jobseekers credits are allowed alongside Voluntary contributions and Class S from your future ARF. These credits might not be essential to boost your Prsi record for qualification for the COAP, but are useful to maintain your qualification for treatment benefits and also to assist you to qualify for BP65.

4. Pre entry credits are not included in your Prsi record statements. These will be added when DSP calculate your COAP.
These do not count towards the 520 full rate paid target.


You should start your ARF immediately. You have enough to make 5k drawdowns for 6 years. You will pay approximately 200 euro per year Prsi to get 52 class S contributions. This is cheaper than paying voluntary contributions.

A total of ARF drawdowns + other unearned income of 5k per year gains you 52 class S. If you have bank deposit interest or share dividends you could use this income to extend the period of drawdowns from your ARF beyond 6 years.

You currently have 48 class A. You are age 59. You need an extra 472 paid contributions. Up to age 66 you have potential to gain an extra 7 years of paid contributions. So 364.
You will have a total of 412 at age 66. You would need an extra 108 contributions to reach 520 paid level. You could defer your pension to achieve the extra 108 contributions.

When your ARF is exhausted you can make voluntary contributions to get to 520 full rate paid. These voluntary contributions will be based on your class S Prsi, so will cost 650 euro per year.

When you reach age 66 you can apply for the COAP.
This will give you an exact figure of how much pro rata pension you would get at that stage.

You can then calculate if it is worthwhile deferring to get a better pension based on having at least 520 full rate paid contributions.

It is vital that you do not accept any pension payments at age 66 if you want to defer. With this in mind, you should opt for payment to your local post office when you apply for the COAP at age 66.

Aim to qualify for BP 65,
There is more information on this at the start of this thread.

Dear S Class. Many thanks for your prompt and comprehensive response to my query. I am grateful for how you outlined the options available to me and will contact the DSP asap.