State Contributory Pension .-Advice

[Lisgoold]

It's interesting to see these award letters, and the explanation of the amount. Presume everyone gets that letter when they are 66?

I have a statement of contributions. So all I have to do is divide the total number of reckonable contributions, by the number of years, between starting to pay PRSI, and the year I turn 66? Then look up which bracket I end up in.

The start date, on the contributions statement is left blank I know when it was, so not sure why that's blank .

 

[Conan]

It's interesting to see these award letters, and the explanation of the amount. Presume everyone gets that letter when they are 66?

I have a statement of contributions. So all I have to do is divide the total number of reckonable contributions, by the number of years, between starting to pay PRSI, and the year I turn 66? Then look up which bracket I end up in.

The start date, on the contributions statement is left blank I know when it was, so not sure why that's blank .

Correct. And I see today that the Minister has announced that the proposed phasing-in of a move to the Total Contribution Approach has been deferred (again and again) until 2025.

 

[LDFerguson]

Correct. And I see today that the Minister has announced that the proposed phasing-in of a move to the Total Contribution Approach has been deferred (again and again) until 2025.

That hollow rattling noise is the sound of the can being kicked down the road ... again ... rather than run the risk of upsetting anyone prior to an election.

 

[jpd]

Well, apart from all the young voters who will be paying for this in the future - glad I'm over 65

 

[Lisgoold]

Correct. And I see today that the Minister has announced that the proposed phasing-in of a move to the Total Contribution Approach has been deferred (again and again) until 2025.

Which happens to be the year I hit 66.

 

[Conan]

Which happens to be the year I hit 66.

If you will have 40 years of contributions (2080 weekly contributions) then you will get a full pension.
If not, then it will be a mix of the Totals and Average method and the Total Contribution Approach (assuming they don’t defer it again). But the current proposal in 2025 would be:
90% based on Total &Average, plus
10% based on TCA
But we will just have to wait and see what emerges.

 

[Lisgoold]

If you will have 40 years of contributions (2080 weekly contributions) then you will get a full pension.
If not, then it will be a mix of the Totals and Average method and the Total Contribution Approach (assuming they don’t defer it again). But the current proposal in 2025 would be:
90% based on Total &Average, plus
10% based on TCA
But we will just have to wait and see what emerges.

I have 887. That won't increase. First year of paying PRSI was 1990. So assuming they do the sum the way I did, gives an average of 25. Which, from memory, is in the middle of one of the ranges. So wouldn't matter if it was out by one number either way I think.

 

[ClubMan]

I have 887. That won't increase.

Not even via credits associated (as far as I know) with this payment?

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

Or via credits associated with other SW payments?
Or via voluntary contributions?

Voluntary social insurance contributions

Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.

www.citizensinformation.ie

 

[Kev1964]

Correct. And I see today that the Minister has announced that the proposed phasing-in of a move to the Total Contribution Approach has been deferred (again and again) until 2025.

Do you have a link to this please? I’m interested in the detail.

 

[Kev1964]

It's interesting to see these award letters, and the explanation of the amount. Presume everyone gets that letter when they are 66?

I have a statement of contributions. So all I have to do is divide the total number of reckonable contributions, by the number of years, between starting to pay PRSI, and the year I turn 66? Then look up which bracket I end up in.

The start date, on the contributions statement is left blank I know when it was, so not sure why that's blank .

Yes I’m also very interested in seeing the content of these letters. Thanks to those who shared them

Everyone who might be entitled to a state contributory pension could benefit from educating themselves about the (regularly changing) and complex rules.

 

[Meath Lady]

It's interesting to see these award letters, and the explanation of the amount. Presume everyone gets that letter when they are 66?

I have a statement of contributions. So all I have to do is divide the total number of reckonable contributions, by the number of years, between starting to pay PRSI, and the year I turn 66? Then look up which bracket I end up in.

The start date, on the contributions statement is left blank I know when it was, so not sure why that's blank .

Lisgoold.
It may not be quite that simple. You may get homemakers or homecarers if there are childminding years or pre entry credits .

The person I spoke to today in SW. said there are currently 26 different ways to work out entitlement for state contributory pension. I am awaiting to hear further from them.

 

[Marsupial]

I have noticed now on citizens advice that if I paid my first full rate contribution before 1991 and before I was 56 (which I did) I can use that date as my entry into employment. In my case this would be 1988/1989. So perhaps this may change my yearly average

Both the PRSI printout that you provided and the letter from Social Welfare indicate that your PRSI date of entry is 1975. Why do you think that it should be 1988?

 

[NoRegretsCoyote]

Do you have a link to this please? I’m interested in the detail.

@Conan - where did you see this?

I've googled a few relevant terms on gov.ie and elsewhere and the last thing I can find is this PQ response from March where the Minister says that the TCA will be phased in over ten years and no mention is made of a change to the timeline.

 

[Kev1964]

@Conan - where did you see this?

I've googled a few relevant terms on gov.ie and elsewhere and the last thing I can find is this PQ response from March where the Minister says that the TCA will be phased in over ten years and no mention is made of a change to the timeline.

I found this in the Business Post dated 30/07/23. I’d have thought the IT or Indo would have the story too by now.

“The rule was due to be phased in gradually, with 10 per cent of a person’s state pension calculated on the total contributions rule and 90 per cent calculated on the existing “averaging” rule. The full total contributions approach was due to be in place by 2034, but this will now be pushed back to 2035.

Humphreys received cabinet approval last week to draft the necessary legislation for the forthcoming introduction of the total contributions rule and other changes to the pension system.”

Humphreys pulls back pension reform until after local elections

Minister’s plan, which means many workers will miss out on the maximum state pension rate of €265 per week, is to be phased in from 2025

www.businesspost.ie

 

[Marsupial]

Do you have a link to this please? I’m interested in the detail.

Extract follows:

"A spokeswoman for Humphreys confirmed that the change was now being delayed for a further year. “Given that it is only just over five months to January 2024, it is proposed that the phased transition should begin in January 2025 so that future pensioners are made fully aware of the change,” she said.

[The cynic in me remembers that the next General Election must take place before March 2025! So more can kicking is virtually guaranteed!]


Humphreys had also committed to raising PRSI for workers and employers to meet the cost of keeping the state pension age at 66. However, the Business Post reported last week that she had missed her deadline of producing the roadmap for the introduction of the PRSI charges by last spring, and there is currently no date for its publication. The state is now spending around €9 billion per year on pensions. [The Business Post didn't clarify whether that's Contributory Pensions or all pensions]

The current state pension calculation system of getting an “average” of people’s PRSI contributions allows some workers to get a full state contributory pension if they had just worked ten years from the age of 55. But the new system will assess people’s PRSI contributions over a 40-year period, meaning that those with just ten years in the workforce will get a much lower state pension in future. The total contributions rule had been recommended by the Commission on Pensions recommendation to help tackle the pensions time bomb.

The rule was due to be phased in gradually, with 10 per cent of a person’s state pension calculated on the total contributions rule and 90 per cent calculated on the existing “averaging” rule. The full total contributions approach was due to be in place by 2034, but this will now be pushed back to 2035." [or later - don't hold your breath!]

 

[Black Sheep]

As your first class A contributions were made prior to April1991 Wops and class D contribution will be ignored and the records will begin counting from there.(1991)
The total number of A contributions and credits would be divided by (1991-2022)=31working years less the number of caring years to get the yearly average

 

[Black Sheep]

Homemakers 8 years would be deducted from the 31 working years leaving the total number of reckonable contributions and credits divided by (31-8) =23.
Are there pre-entry or change of status credits available to you.
It appears to me you would be entitled to almost a full rate of pension

 

[Meath Lady]

As your first class A contributions were made prior to April1991 Wops and class D contribution will be ignored and the records will begin counting from there.(1991)
The total number of A contributions and credits would be divided by (1991-2022)=31working years less the number of caring years to get the yearly average

Thank you Black Sheep.
As my first full rate contribution was 88/89 so before 1991 I am eligible to use 88/89 as my entry date. Dept have confirmed this and in fact that is the date they used for the long average which is the most finicially productive in my case.

However as my youngest child was born 15 th Feb 1990 and Homemakers was introduced on 6th April 1994 they have discounted 7 years which I accept.

However from reading some info I feel I should have been awarded the balance of the 8th year in credits so approx 44/45 credits but was only allowed 7.
If I am awarded these I will have 1078 plus 34/35 which I think will get me to the next bracket.
I have currently asked for a review of these so fingers crossed.
Thsnks gor your input and help. I will update when I hear further and hooefully won't need to go to Appeal

 

[Black Sheep]

Those 7 credits cover the period January 1st to Feb15th 2002

 

[Meath Lady]

Those 7 credits cover the period January 1st to Feb15th 2002

I understand that Black Sheep. However because the years was not straightforward calendar years until 2001 I have 7 years from April 94/95 until April 00/01 inclusive but feel and perhaps I am wrong that I should have credits from April 01 to December 01 and then the 7 allotted until 15 th Feb 2002 or that overall I should be awarded 7 years disregard and 44 or 45 credits iykwim.
Let me know what you think. I have contacted DSP but awaiting a reply.
Thanks