So why are they not allowed to make voluntary contributions to make up the shortfall? As far as I know most countries allow that. It would give those folks at least a part pension and some return for their paid PRSI contributions.
So why are they not allowed to make voluntary contributions to make up the shortfall? As far as I know most countries allow that. It would give those folks at least a part pension and some return for their paid PRSI contributions.If someone aged 66 has spent less than 10 years of their life working and paying PRSI in this country, why should they be entitled to a State Contributory Pension? As has been said above, most countries have a cut-off point somewhere - some longer; some shorter.
So why are they not allowed to make voluntary contributions to make up the shortfall?
What was grossly unfair about the average contribution system was that it was possible for someone to get a full state pension with just 10years contributions provided they only worked in those 10 years and didn't work and pay prsi in any other period, for example if someone came to ireland started working at age 55 and retired at 65, they could have accumulated the miminum 520 contributions and their average contributions were also maximised so a full state pension. Albeit very few people would have qualified as in this example, however many immigrants would have approximated this work pattern and were highly advantaged by this system. Whereas an irish emmigrant that worked for a year after school, immigrated to another country for say 15, 20 years and then returned at say 40 years of age and payed another 25, 30 years contributions was only entitled to a much smaller pension as starting prsi contributions after school would have brought their average contributions way down. How such unfair anomalies were allowed to persist for so long beggars beliefFor what it's worth I don't agree with the change. Probably a biased opinion, because I did much better under the average method.
One thing very unfair about the TCA is that a person who works for 9 years and 51weeks (519 contributions) gets no contributory pension. Every contribution should count in the so called total contributions approach.
It does not matter if a person gets a tenner or the full pension. The system is already in place. There are no further costs involved.
No. The pension is then fixed going forwardI will hit 66 in Dec 2026. My reading is that I am entitled to 80 percent based on the yearly average and 20 percent on tca. The word transition really worries me. Does this mean I continue to transition to 70 30 , 60 40, 50 50 etc over the following years or is.my pension fixed at the rate I get when I reach 66
Anybody who is subject to the compulsory insurance charge on their Irish employment income (Prsi), should be entitled to the benefits of this insurance.Separate point - what about the cost of the actual pensions?
What’s the evidence for “large numbers” being excluded?The system of excluding large numbers of insurance payers is totally unfair.
Anybody who is subject to the compulsory insurance charge on their Irish employment income (Prsi), should be entitled to the benefits of this insurance.
What about the cost of the pension paid to the person with 520 contributions ?
It does not matter if a person gets a tenner or the full pension. The system is already in place. There are no further costs involved.
There are some costs when the pension application comes in. Someone has to deal with that and get paid for the job. But after that a lot is computerized and set on automatic. Give it ten years and most of the job- if not all- is done by AI.My reply you're quoting was arguing against the above point that "there are no further costs involved". Of course there would be further costs involved.
In this case I am Mary. I’ll end up with about 85% of the COAP under TCA.I believe the current Contributory Pension scheme discriminates against people like me - let me illustrate this by way of an illustrative story – loosely based on my facts. I don't believe this discrimination was intentional and it can be easily corrected. Let's suppose 3 individuals travelled to Ireland on the same flight on Jan 1st 2000, and each finds a long term job for the next 25 years in the same location and each retires at the end of 2025, with exactly the same employment history for that these 25 years.
Individual A (Jim)
Individual B (Pat)
- Jim had previously never been to Ireland prior to this.
- Here worked continually for 25 years and retired at the end of 2025.
- Based on the current contribution rules, Jim would be entitled to a full Irish Contributory Pension - based on 25 years of contributions and an employment record of 25 years.
- Therefore Jim gets a 100% contributory pension.
Individual C (Mary)
- Pat, born and bread in Ireland.
- He lived and worked in Ireland for 5 years before emigrating in 1990. His work was “cash in hand” and not recorded on the system.
- After returning to work in Ireland he worked "side by side" with Jim until he two retired at the end of 2025.
- Based on the current contribution rules, Pat would be entitled to a full Irish Contributory Pension - based on 25 years of contributions and an employment record of 25 years.
- Therefore Pat also gets a 100% contributory pension.
So the only one of the 3, who had paid contributions, actually looses out - this cannot be fair?
- Mary they lived and worked in Ireland for 5 years before emigrating in 1990,
- When Mary worked it was “Through the system”.
- Mary worked in a similar job to Pat for these 5 years - however she paid PRSI contributions for the period whilst Pat did not.
- Based on the current contribution rules, Mary would NOT be entitled to a full Irish Contributory Pension - her pension would be based on 30 years of contributions and an employment record of 40 years)
- Mary would loose out on 25% of their contributory pension – because she had worked in Ireland for 5 years and paid PRSI contributions.
- Mary would only receive 75% of a contributory pension - although she had done exactly the same work as her colleagues, Jim and Pat for the previous 25 years.
Mary's situation, is similar to mine and to many Irish people who lived out of the country for a few years (or longer) having started work in Ireland. In my case my work was part time whilst in college - and this would be similar to a lot of others who emigrated in the various recessions in Ireland.
- The system discriminates against Mary as she worked for 5 years and paid her contributions.
- In my view our system should never discriminate against anyone who worked and paid their contributions?
- I appreciate the pension system is being changed currently - but the current changes will not fix the above mentioned discrimination.
What to do about it?
Any thoughts from anyone?
- I think a small legislative change could fix it – to exclude the number periods when the person was not available for work (due to being out of the country, etc) from the calculation.
- Then in the case of Mary, her total contributions would be based on the 30 years (25+the initial 5 years) and the denominator (the cause of issue) would be adjusted to 30 (excluding the 10 years working abroad), thus treating Mary the same as the others.
- Easily done – and eliminating the unintended discrimination.
You're making suggestions for future legislative changes based on issues with a system that is already being phased out anyway.I believe the current Contributory Pension scheme discriminates against people like me - let me illustrate this by way of an illustrative story – loosely based on my facts. I don't believe this discrimination was intentional and it can be easily corrected. Let's suppose 3 individuals travelled to Ireland on the same flight on Jan 1st 2000, and each finds a long term job for the next 25 years in the same location and each retires at the end of 2025, with exactly the same employment history for that these 25 years.
Individual A (Jim)
Individual B (Pat)
- Jim had previously never been to Ireland prior to this.
- Here worked continually for 25 years and retired at the end of 2025.
- Based on the current contribution rules, Jim would be entitled to a full Irish Contributory Pension - based on 25 years of contributions and an employment record of 25 years.
- Therefore Jim gets a 100% contributory pension.
Individual C (Mary)
- Pat, born and bread in Ireland.
- He lived and worked in Ireland for 5 years before emigrating in 1990. His work was “cash in hand” and not recorded on the system.
- After returning to work in Ireland he worked "side by side" with Jim until he two retired at the end of 2025.
- Based on the current contribution rules, Pat would be entitled to a full Irish Contributory Pension - based on 25 years of contributions and an employment record of 25 years.
- Therefore Pat also gets a 100% contributory pension.
So the only one of the 3, who had paid contributions, actually looses out - this cannot be fair?
- Mary they lived and worked in Ireland for 5 years before emigrating in 1990,
- When Mary worked it was “Through the system”.
- Mary worked in a similar job to Pat for these 5 years - however she paid PRSI contributions for the period whilst Pat did not.
- Based on the current contribution rules, Mary would NOT be entitled to a full Irish Contributory Pension - her pension would be based on 30 years of contributions and an employment record of 40 years)
- Mary would loose out on 25% of their contributory pension – because she had worked in Ireland for 5 years and paid PRSI contributions.
- Mary would only receive 75% of a contributory pension - although she had done exactly the same work as her colleagues, Jim and Pat for the previous 25 years.
Mary's situation, is similar to mine and to many Irish people who lived out of the country for a few years (or longer) having started work in Ireland. In my case my work was part time whilst in college - and this would be similar to a lot of others who emigrated in the various recessions in Ireland.
- The system discriminates against Mary as she worked for 5 years and paid her contributions.
- In my view our system should never discriminate against anyone who worked and paid their contributions?
- I appreciate the pension system is being changed currently - but the current changes will not fix the above mentioned discrimination.
What to do about it?
Any thoughts from anyone?
- I think a small legislative change could fix it – to exclude the number periods when the person was not available for work (due to being out of the country, etc) from the calculation.
- Then in the case of Mary, her total contributions would be based on the 30 years (25+the initial 5 years) and the denominator (the cause of issue) would be adjusted to 30 (excluding the 10 years working abroad), thus treating Mary the same as the others.
- Easily done – and eliminating the unintended discrimination.
I think pension changes here, as in the UK and many other countries, use a phased approach over 10 years as it's unfair to make significant changes faster when those coming close to retirement have plans in place and no time to pivot based on new rules.The current system advantages some people considerably relative to others based on when they started their prsi contributions. It is being fazed out over next decade, however people can still choose to use the average contributions systems over the next decade if it gives them a higher pension. I think this should have been phased out much faster as some people are still qualifying for full state pensions with only 10 to 15 years prsi contributions because they were lucky enough to only start paying prsi in Ireland very late in their career. Why was this ever allowed in the first place, anyone in this situation should have at most received 50% of full pension. It is grossly unfair to someone who worked a full career with 40 years of contributions
Under EU law, discrimination based on sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation is prohibited.I wonder if there would be any chance of somebody taking a succesful case against the state for blatent discrimination ?
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