Retiring early & the state pension

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Mez!

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Say I retire early at 60, with 2,080 class A PRSI contributions. I use my private pension to fund my expenses.

When I reach 66, do I get a choice whether I’m assessed for the state pension using the Total Contributions Approach, or the Normal Average rule?

Citizens Information website says “you can be assessed using either”. However, it fails to clarify if this means you have a choice, or there is a set of rules which determine how you will be assessed.
 
Both systems are automatically calculated and the most beneficial one is paid.
If you are currently under 60 the averaging system will be mostly or fully phased out before you claim your pension.
 
Just seen my wife's statement, and can't make head nor tail of it as she's pretty much always worked full time - what is the difference between 'Reckonable Paid Contributions' and 'Reckonable Credited Contributions' and looks like both together will give total contributions, which is the important number.
 
Reckonable means that the contributions will be counted towards the total for pension (and other SW benefits).
Paid means that there was prsi paid for these weeks at the appropriate class (A1, for example)
Credited means contributions awarded by SW - if your wife was claiming Jobseekers, illness benefit, maternity benefit, etc, she would get a credit for each week claimed.
 
S class said:
The important column is the "Combined Reckonable contributions and credited contributions for pension"

If she has 2080 here she will get full pension.
If she has a smaller amount she will get a reduced pension.
Click to expand...
Great . A clear and concise answer
 
S class said:
The important column is the "Combined Reckonable contributions and credited contributions for pension"

If she has 2080 here she will get full pension.
If she has a smaller amount she will get a reduced pension.
Click to expand...
Quick additional question S class if I may. If you have say 2,000 prsi contributions at retirement age how is your entitlement under TCA calculated. Is it 2,000/2080 = 96% of the full rate?

Thanks, you are a goldmine of information on this subject.

g
 
garbanzo said:
Quick additional question S class if I may. If you have say 2,000 prsi contributions at retirement age how is your entitlement under TCA calculated. Is it 2,000/2080 = 96% of the full rate?

Thanks, you are a goldmine of information on this subject.

g
Click to expand...
Yes that's it.

If she is retiring early there are ways of getting extra contributions. See here.

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
Continuing with my original scenario - say I retire early at 60, with 2,080 class A PRSI contributions. I use my private pension to fund my expenses through an ARF. I understand that my PRSI contributions will now be class S.

Will five years (age 60-65) of PRSI class S contributions make me eligible for the over 65’s benefit?
 
Mez! said:
Continuing with my original scenario - say I retire early at 60, with 2,080 class A PRSI contributions. I use my private pension to fund my expenses through an ARF. I understand that my PRSI contributions will now be class S.

Will five years (age 60-65) of PRSI class S contributions make me eligible for the over 65’s benefit?
Click to expand...
According to this you will be eligible:

Operational Guidelines: Treatment Benefit Scheme

www.gov.ie www.gov.ie

Or did you mean this here:

Payment for people who retire at 65

If you retire at 65, you may qualify for a benefit payment until you reach 66. The payment is similar to Jobseeker’s Benefit, but you don’t need to be looking for work or sign on at your local Intreo centre.
www.citizensinformation.ie www.citizensinformation.ie
 
Last edited:
No the ARF class S won't work.
You will need to claim Jobseekers benefit and then continue to sign on for JB credits.
You will also need 13 weeks of employment to gain 13 class A contributions.

Read this thread to get more information

Key Post - PRSI and planning retirement

This Key Post is in the form of a FAQ where I don't know many of the answers. I will update the post as I get answers. 1. PRSI payable on reaching state pension age Answer: 0 (Class M) 1a. Does this relate to the start of the tax year in which you become 66? Or to after your birthday? Answer...
www.askaboutmoney.com
 
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