State pension under current rules for my wife

[Blackrock1]

Hi all

Just trying to understand considerations around state pension for my wife under the rules as they stand right now (understand this will change but to what who knows)

She is 43 and worked from 23 to 40 full time and took redundancy at that point. We decided, with two young kids, that it was better for our family for her to take some time out and it has proven to be the correct decision.

Wondering now if she doesn't go back to wear for the foreseeable how she would be treated under current rules.

Very simply I'm thinking she has 17 years of PRSI contributions plus 16 years of caring for our youngest child who was 2 when she took redundancy (does the scheme cover up to 18?) so that's 33 years assumed?

Could potentially buy a commercial property and have the rental income assigned to her to increase PRSI contribution at that point if needs be?

 

[ClubMan]

Very simply I'm thinking she has 17 years of PRSI contributions plus 16 years of caring for our youngest child who was 2 when she took redundancy (does the scheme cover up to 18?) so that's 33 years assumed?

You don't have to guess.
She can request her PRSI contribution record from SW via her online myWelfare account.

MyWelfare Homepage

MyWelfare is the online home of welfare services. It allows you easy online access to a range of services

services.mywelfare.ie

Then if it doesn't mention any homemaker credits she can contact SW about that.

Homemaker's Scheme

If you care full-time for children, or for an ill or disabled person, the Homemaker’s Scheme makes it easier for you to qualify for a State Pension (Contributory).

www.citizensinformation.ie

Voluntary contributions might be another option if necessary:

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

Buying a rental property solely/mainly to obtain PRSI contributions towards the pension seems a bit extreme, especially when many are getting out of the rental market for reasons discussed at length elsewhere.

 

[RedOnion]

@Blackrock1
By the time your wife reaches pension age, it will be under Total Contributions Approach, so it's the Homecaring Periods scheme that's relevant

HomeCaring Periods Scheme

The HomeCaring Periods Scheme can help you get a higher rate of State Pension (Contributory) if you spent time out of work to care full-time for a child aged under 12, or a person aged 12 or over (including an adult) who needed an increased level of care.

www.citizensinformation.ie

 

[Blackrock1]

@Blackrock1
By the time your wife reaches pension age, it will be under Total Contributions Approach, so it's the Homecaring Periods scheme that's relevant

HomeCaring Periods Scheme

The HomeCaring Periods Scheme can help you get a higher rate of State Pension (Contributory) if you spent time out of work to care full-time for a child aged under 12, or a person aged 12 or over (including an adult) who needed an increased level of care.

www.citizensinformation.ie

Thanks am away at the moment but will try calculate this when I'm back, thank you both for the constructive advice

 

[ClubMan]

Thanks am away at the moment but will try calculate this when I'm back, thank you both for the constructive advice

As I said, you don't really need to calculate anything - just request the PRSI contribution tally from SW via myWelfare and, if homemaker credits have not already been applied, apply for them now.

 

[Early Riser]

As I said, you don't really need to calculate anything - just request the PRSI contribution tally from SW via myWelfare and, if homemaker credits have not already been applied, apply for them now.

I am not sure about that. As Mrs B is only 43 now I think it is the Home Caring Periods Scheme which is relevant, as linked by @RedOnion above. You apply for this when approaching State Pension Age:

"You may apply for HomeCaring Periods six months prior to reaching pension age"

 

[presidenttttt]

This should be dreadfully simple but the more I read about the homemaker policy the more confused I am getting, I am going to blame familiarity with another jurisdiction.

Why does it take about removing years to boost the average? Is the pension not based on 520 stamps? ie 10 years contributions. Where does the average of anything come into it?

 

[Premos]

Home carer scheme stops when the youngest reaches 12 (max 20 years)

 

[Marsupial]

This should be dreadfully simple but the more I read about the homemaker policy the more confused I am getting, I am going to blame familiarity with another jurisdiction.

Why does it take about removing years to boost the average? Is the pension not based on 520 stamps? ie 10 years contributions. Where does the average of anything come into it?

Because the Homemaker's Scheme relates to the the Yearly Average Method of pension calculation, hence a reduction in the divisor ("removing of years") will increase the applicant's yearly average.

The HomeCaring Periods Scheme on the other hand relates to the newer (and fairer) Total Contributions Approach (TCA), this doesn't involve averaging, so the removal of years isn't relevant.

Having 520 paid reckonable contributions on one's PRSI record is merely the eligibility requirement for receiving a State Contributory Pension but once eligible, a lot of additional factors come into play.

Incidentally, why should it be "dreadfully simple"? Pensions are complicated things! Although in time the TCA should make things less complicated.

 

[presidenttttt]

Thanks both.

The particular policy reads like it should be straight forward, is what I meant. I am not familiar with the additional factors that come into play - I had understood the amount of pension you get was purely a factor of # of contributions made, with the odd exception for carers and the similar. Even under the new scheme wording (the TCA) it is not immediately clear what having the time recognised means. Presumably 1 week caring counts as 1 contribution but I don't see that it states that.

 

[Marsupial]

The particular policy reads like it should be straight forward, is what I meant. I am not familiar with the additional factors that come into play - I had understood the amount of pension you get was purely a factor of # of contributions made, with the odd exception for carers and the similar. Even under the new scheme wording (the TCA) it is not immediately clear what having the time recognised means. Presumably 1 week caring counts as 1 contribution but I don't see that it states that.

You've partially answered your own question there. The potential eligibility for a range of extra credits is what I described as an "additional factor".
As are reckonable PRSI credits for overseas employments. And the purchase of voluntary PRSI contributions! And don't forget PECs, which differ for every claimant. And then there's the possibility of Change of Status credits! (And I could go on!)