Key Post PRSI and planning retirement
- Thread starter outofmymind
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I made an error in the above answer it should read as below.
Answer: There is some flexibility regarding when the contributions need to be made. This is explained in the "Operational guidelines for 65s benefit". i.e. They do not necessarily have to be made during the year of the person's 63rd birthday.
- If a person does not have a minimum of 39 A contributions in the year of their 63rd birthday they can still qualify if they have a minimum of 26 paid A contributions in the year of their 62nd birthday and also a minimum of 26 paid A contributions in the year of their 63rd birthday.
- If a person only has at least 39 credited contributions in the year of their 63rd birthday, they could still qualify.
- They would need to have at least 13 paid class A contributions in any one of the following years.
- The year of their 61st, 62nd, 64th or 65th birthday.
- If they cannot qualify using any of the above they might also be able to qualify based on their class S Prsi contributions. The rules for class S are complex and are explained in the Operating guidelines for 65s benefit.
Hello redstar,
I made a mistake in the answer to question 11.
In your case if you retire on your 62nd birthday, you would need a minimum of 13 paid A contributions for that year. You would also need at least 39 credited class A in the year of your 63rd birthday. You need to make sure to sign on for credits after you retire. Sorry for the confusion.
Up to age 66.
This age limit might be raised for people who defer their contributory pension beyond age 66.
Changes to the State Pension (Contributory) in Ireland
Changes to the State Pension including access to pensions for long-term carers
www.gov.ie
However a maximum of 520 credits are reckonable when using the TCA calculation method.
If Home Caring Periods are involved a maximum of 20 years of reckonable credits are allowed.
There is no mention of a limit of 520 reckonable credits when using the Averaging calculation. Maybe the limit applies or maybe not ?
How to calculate your State Pension (Contributory) rate
How to calculate your State Pension (Contributory) rate using the Contribution Statement available on MyWelfare
www.gov.ie
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Thanks S Class. I hadn't seen this page before now and it's prompted me to request a new digital statement for my contributions and credits to date. The new layout is clearer and totals up the relevant columns. A useful improvement on the old format.Up to age 66.
This age limit might be raised for people who defer their contributory pension beyond age 66.
Changes to the State Pension (Contributory) in Ireland
Changes to the State Pension including access to pensions for long-term carers
However a maximum of 520 credits are reckonable when using the TCA calculation method.
If Home Caring Periods are involved a maximum of 20 years of reckonable credits are allowed.
There is no mention of a limit of 520 reckonable credits when using the Averaging calculation. Maybe the limit applies or maybe not ?
How to calculate your State Pension (Contributory) rate
How to calculate your State Pension (Contributory) rate using the Contribution Statement available on MyWelfare
I couldn't see anything in the guidelines about how the pension might be calculated for persons who worked and paid contributions overseas.
outofmymind
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Have updated the original post with additional/revised information from @S class - to whom we are all surely grateful.
I have another question: If someone takes early retirement (say at 60) and wants to go on a long trip away immediately afterwards - say a couple of months, and part of this uses up the remainder of their holiday entitlement from work (so they are still officially employed) plus continuing beyond that, how would they go about starting to sign for credits/claim JSB? Can they start their sign on when away? Or can they pre-sign on before they go? Or would they need to start the sign on process when they get back? If so, would the gap of a few weeks affect their entitlement to JSB? Thanks
I have another question: If someone takes early retirement (say at 60) and wants to go on a long trip away immediately afterwards - say a couple of months, and part of this uses up the remainder of their holiday entitlement from work (so they are still officially employed) plus continuing beyond that, how would they go about starting to sign for credits/claim JSB? Can they start their sign on when away? Or can they pre-sign on before they go? Or would they need to start the sign on process when they get back? If so, would the gap of a few weeks affect their entitlement to JSB? Thanks
You are only eligible from when you officially finish work. So if you are on holidays with your employer till a certain date then they will reflect hat on your final leaving letter. That date is the start of your entitlements so you can't start at a date that suits you and collect for 9 months. If you don't sign on at the start and there's a gap you won't be deemed looking for work and won't get a stamp. You can do all the rigmarole online now for initial signing on but you'll need to be in the country to collect once a week. If not you need to inform them and you are only entitled to 2 weeks 'holiday' pay
- any above this is deemed unpaid and not looking for work.outofmymind
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So for example, if you were away for the first month after officially finishing work and then signed on for JSB you would only get 9-1=8 months JSB? is that correct?You are only eligible from when you officially finish work. So if you are on holidays with your employer till a certain date then they will reflect hat on your final leaving letter. That date is the start of your entitlements so you can't start at a date that suits you and collect for 9 months. If you don't sign on at the start and there's a gap you won't be deemed looking for work and won't get a stamp. You can do all the rigmarole online now for initial signing on but you'll need to be in the country to collect once a week. If not you need to inform them and you are only entitled to 2 weeks 'holiday' pay
You would get paid 2 weeks holiday for the first month and then 8 months after.
Edit: Actually, if you didn't sign you would not get the two weeks as a holiday but you could take two weeks holidays in the 8 months thereafter.
A vaguely related question to the one above if I may.
Let's say I retire this Thursday, October 5th, having paid PRSI at B rate for over 30 years, and I have a new employment lined up starting on November 6th.
Should I inform my local Intreo office immediately, ie on this Friday, and request that my record be changed to reflect that I will be paying PRSI at A rates from that date, even though I'll have a month of leisure before starting the new employment?
Let's say I retire this Thursday, October 5th, having paid PRSI at B rate for over 30 years, and I have a new employment lined up starting on November 6th.
Should I inform my local Intreo office immediately, ie on this Friday, and request that my record be changed to reflect that I will be paying PRSI at A rates from that date, even though I'll have a month of leisure before starting the new employment?
If you sign up immediately you will get B credits until you begin your new employment. After you get your first class A contribution all your B contributions for this year and last year will be converted to class A credits. By signing up immediately you would gain an extra few weeks of A credits.
Hi,
Another similar query for “S class“ please.
If I retire early next year on PS pension at 55 having paid PRSI at B rate for 30 years, but I have no new employment plans what are my options.?
Should I inform/sign on with my local Intreo office immediately. - what is the point/Is there any benefit?
If I withdraw the minimum €5000 from my ARF for the next 10 years until age 65 will I qualify for a reduced contributory pension at 66? - if so how is PRSI actually paid on this withdrawal?
just trying to ensure I take the right steps.
Many thanks,
Another similar query for “S class“ please.
If I retire early next year on PS pension at 55 having paid PRSI at B rate for 30 years, but I have no new employment plans what are my options.?
Should I inform/sign on with my local Intreo office immediately. - what is the point/Is there any benefit?
If I withdraw the minimum €5000 from my ARF for the next 10 years until age 65 will I qualify for a reduced contributory pension at 66? - if so how is PRSI actually paid on this withdrawal?
just trying to ensure I take the right steps.
Many thanks,
If you sign on for class B credits there is a small benefit. The B credits will slightly increase a spouse (widows) pension.
The most beneficial arrangement is to immediately work for 1 week ( minimum earnings 38 euro, so a few hours work) and gain 1 paid class A contribution. Then sign on for A credits. You then get some of your class B converted to class A credits. These credits will increase your contributory pension. Continue signing on for credits to age 66. These class A credits will allow you to qualify for treatment benefits.
When you withdraw 5000 euro per year from an ARF the 52 class S contributions are automatically deducted by the ARF provider and added to your Prsi record.
10 years of ARF withdrawals will get you the 520 minimum full rate Prsi contributions needed to qualify for the contributory pension.
Once you reach this level all your class A credits will also be reckonable.
If you manage to get 1 class A contribution you can continue to sign on for class A credits and also have class S contributions.
Being in both the A and S systems is advantageous.
It is difficult to qualify for 65s benefit in the class S system, with an ARF.
In the class A system, you would just need part time employment for 13 weeks, to qualify.
The most beneficial arrangement is to immediately work for 1 week ( minimum earnings 38 euro, so a few hours work) and gain 1 paid class A contribution. Then sign on for A credits. You then get some of your class B converted to class A credits. These credits will increase your contributory pension. Continue signing on for credits to age 66. These class A credits will allow you to qualify for treatment benefits.
When you withdraw 5000 euro per year from an ARF the 52 class S contributions are automatically deducted by the ARF provider and added to your Prsi record.
10 years of ARF withdrawals will get you the 520 minimum full rate Prsi contributions needed to qualify for the contributory pension.
Once you reach this level all your class A credits will also be reckonable.
If you manage to get 1 class A contribution you can continue to sign on for class A credits and also have class S contributions.
Being in both the A and S systems is advantageous.
It is difficult to qualify for 65s benefit in the class S system, with an ARF.
In the class A system, you would just need part time employment for 13 weeks, to qualify.
To clarify -
If I do nothing regarding work or signing on in respect of credits and just proceed with the ARF withdrawals from age 55 - 65 will I qualify for a reduced contributory pension based on the Class S credits even though I’ll be in receipt of a PS pension from 55?
You are the “AAM Guru“ on this subject - many thanks for your knowledge.
If I do nothing regarding work or signing on in respect of credits and just proceed with the ARF withdrawals from age 55 - 65 will I qualify for a reduced contributory pension based on the Class S credits even though I’ll be in receipt of a PS pension from 55?
You are the “AAM Guru“ on this subject - many thanks for your knowledge.
Pension calculator chart.
Changes to the State Pension (Contributory)
Learn about all changes to the State Pension in Ireland in 2024
www.gov.ie
Information on future changes
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No voluntary contributions are allowed for this year.
There is an exception to this rule, if the voluntary contributions are needed to reach the 520 minimum full rate paid contributions, in order to qualify for the contributory pension.
This would be of benefit to people with class B or D contributions and less than 520 paid class A or S approaching retirement age.
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Just re-visiting this one related to 65's benefit...
From Citizens Information;
"
- 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."
- The Governing Contribution Year is the year of 63rd birthday
- Year of Age 63; Needs 39 A class contributions (13 of which are paid)
OR
- Year of Age 62; Needs 39 A class contributions (13 of which are paid) satisfying the 26 + 13 requirement PLUS at least 26 PRSI A contributions in year of 63rd birthday
Is that correct ?