PRSI class for people between 66 and 70 being on the non- contributory pension and working

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Forumuser

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The recent changes in the pension system made it possible for people to work and supply PRSI contributions even after reaching the age of 66. This can be done until one reaches the age of 70- under the condition that one has not started to draw down a contributory state pension.

How would this work out in the following case:
A married man reaches the age of 66 and is short of a specific number of PRSI contributions. He fails to get the contributory pension and is awarded instead the non contributory pension. He decides to take on a part time job to acquire the missing number of PRSI contributions before he reaches the age of 70. This should be not too difficult because the missing PRSI contributions are just a few weeks more than a full year. The wages will be around 60 euros a week and won't affect the amount of his non contributory pension payment.
Our man won't be liable to pay PRSI contributions himself because the salary is well under the limit- but still above the minimum income limit of Euro 38. This means that the employer would be liable to pay a PRSI contribution of 8.9%- which would secure our man a weekly PRSI contribution.

Would our man get a weekly PRSI A class contribution which could be used to improve his PRSI record- or would he be stuck with a "J" class- or any other PRSI class- which would not be reckonable for pension purposes?

In other words: Is this plan a good plan to secure a contributory pension- or does it need to go back to the drawing table?
 
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The non contributory pension would also end if a person managed to gain extra means. Maybe an inheritance.
They would then be discriminated against if they continued in employment and did not gain Prsi contributions up to age 70.
 
This is all very interesting- but not really an answer to my question.

Again: What PRSI class will our man be put into? A or J?
 
Forumuser said:
He fails to get the contributory pension and is awarded instead the non contributory pension. He decides to take on a part time job to acquire the missing number of PRSI contributions before he reaches the age of 70.
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If he has more than 520 contributions and applied for a pension at age 66, he will qualify for a portion of the contributory pension.

Would he then be awarded this portion of the contributory pension, and then if he passed a means test would he also then get some portion of the non contributory pension ?

If this happens my guess is that he would be class J on any future earnings.

If he had less than 520 contributions and applied for a pension at age 66 he will not get any portion of the contributory pension.
He probably would then be class A on future earnings up to age 70.

If he decides not to apply for the pension at age 66 he could claim Jobseekers allowance for any unemployment days.

He would need to contact DSP and ask for the required answers.
 
Page 4 here implies they’ll be Class A if they are over 66 and in employment and not drawing the contributory pension.

They have to be born after 1 January 1958 though.
 
Thanks. It looks like a good plan so.
The missing PRSI contributions will lift our man over the 520 contribution threshold and activate all those credits he accumulated over his working life. That will give him a contributory part pension which would be close to what he is getting now as non contributory pension.
 
S class said:
If he has more than 520 contributions and applied for a pension at age 66, he will qualify for a portion of the contributory pension.

Would he then be awarded this portion of the contributory pension, and then if he passed a means test would he also then get some portion of the non contributory pension ?

If this happens my guess is that he would be class J on any future earnings.

If he had less than 520 contributions and applied for a pension at age 66 he will not get any portion of the contributory pension.
He probably would then be class A on future earnings up to age 70.

If he decides not to apply for the pension at age 66 he could claim Jobseekers allowance for any unemployment days.

He would need to contact DSP and ask for the required answers.
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It is not possible to get a part contributory pension and a part non contributory pension at the same time. You can get only one of the two pension types. Either you go for the contributory pension- if you have the right figures. Or you go for the non contributory pension if you fail to get the contributory pension.
Signing on for unemployment benefit/assistance would not amass any needed contributions. It would only accumulate more credits- which would be useless....unless he reaches the 520 contribution threshold.
So a part time job with a weekly PRSI A class contribution will be his ticket.
 
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If they are awarded the non contributory pension they get €277.
The full contributory pension is €289
Partial contributory pension is ????
Seems a very convoluted scheme to try bridge the difference.

I think there is a scheme where people can defer the old age pension and get a higher rate.

Would it not be simpler for them to continue working beyond 66 until they have worked a sufficient number of weeks to qualify?
 
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BlackandBlue said:
If they are awarded the non contributory pension they get €277.
The full contributory pension is €289
Partial contributory pension is ????
Seems a very convoluted scheme to try bridge the difference.

I think there is a scheme where people can defer the old age pension and get a higher rate.

Would it not be simpler for them to continue working beyond 66 until they have worked a sufficient number of weeks to qualify?
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There is a lot going on at the same time.
The person in question has just reached 66 a few weeks ago. He has plenty of credits- but cannot use any of them unless he reaches the 520 contribution threshold. So he has no choice but must continue to work.
You cannot defer anything to which you do not qualify. So our man won't be able to access a higher contributory pension rate even when he reaches the 520 contribution threshold some day next year. As far as I was told the receipt of a non contributory pension in the time until someone reaches the required contribution level excludes anyone from getting a contributory pension with a higher than basic rate. Our man's future contributory pension will be calculated only on the basic rate.
Deferral would also mean a further devaluation of the possible pension- each year the method of calculating the pension will change. Next year our man would be still qualify for 80% average and 20% TCA calculation. The year after it is already 70 to 30. And at one point the whole thing makes no sense anymore because the entitlements to the contributory pension will be too low and he would have no choice but to accept the non contributory pension for good.
He just has this short time window to act.
 
@Forumuser

Your friend‘s work history a bit unusual!

Maybe could you post his full circumstances? Such as when he started paying PRSI, how many credits, any work history abroad, etc

There might be further advice here that could be useful.
 
I don't have the full figures available in detail.
What this case makes so unusual is the high numbers of credits our man has. He was sick for many years- and on unlimited illness benefit. That provided him with the credits. He should have been transferred onto the Invalidity Pension years ago- but there was no action from the Department. He himself had no idea about the whole thing- so he acted neither while it was still possible. Otherwise he would not be in this situation he is now.
The Pension Office already had a look at the case and confirmed that our man would qualify for the contributory pension if he delivers the missing contributions. The only open question for him was the above mentioned PRSI class/non contributory pension question. That was answered.
 
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