Not really. So long as you have a child under the age of 12 you get Credits added to your record under the Homemakers Scheme. These Credits are as good as Contributions. There is a limit to the amount of Credits you can get (1080 or 20 years).
The reference to elder care is something I hadn't considered (thanks) but my questions are really around the mechanics of the Homemakers scheme's treatment for prsi contributions and setting to one side one's wishes to re-enter paid employment or not.I would suggest return to work when you feel the children are old enough for you to do that. You may wish to return to work for reasons other than securing a full pension.
You may need carers leave to care for a family member or elderly relative at a later stage. This would be part of the 20 years allowed.
This is the treatment for calculating yearly average, under the average approach.Do you receive credits though? Citizen Information states "Homemaking years can be disregarded for state pension (contributory) purposes". Which is not the same as receiving credits pari passu with working contributions.
Say you work 10 years (18 to 28) and are a homemaker for 20 years (28 to 48) and neither for the remainder (48 to 68).
This is my understanding of it, but I have only looked at this recently and I might be completely wrong.
Paid contributions: 10 x 52 = 520
Homemaker credits: 20 x 52 = 1040
Total contributions: 1,560
Total years: 50
Average contributions: 31.2
Or under the Aggregated Contributions Method
You get a pro-rata amount based on 40 years maximum.
Paid: 10 years
Home maker: 20 years
Total 30 years
= 75% of 40 years maximum
So she would get 75% of the full pension.
I thought from my reading of it a good while ago Brendan that 40 years was the denominator, no?
If using the Averaging Approach the denominator is the time between the first PRSI payment and the 66th birthday.
Under the Total Contribution Approach you get 1/40th of the State Pension for each year of contribution (including Credits).Yes, understood but what is the denominator under TCA? I thought it was 40 years?
The Homemakers Scheme gives credits post 1994. The Homecaring Periods Scheme applies to years prior to 1994.Is the Homemakers Scheme still only effective for credits from 1994 or was that changed by any chance.
Thank youThe Homemakers Scheme gives credits post 1994. The Homecaring Periods Scheme applies to years prior to 1994.
Q12. What will my rate of payment be under the Total Contributions Approach?
This will depend on your paid contributions, your HomeCaring credits, and any other credited contributions you have (e.g. from periods in receipt of Jobseekers benefit).
40 years contributions are required for a maximum rate pension entitlement, however these do not all have to be paid contributions. You may use up to 20 years of HomeCaring Credits, and up to 10 years of non-HomeCaring credits (although the combined total of credits may not exceed 20 years).
This total is added to your paid contributions, to give your Total Contributions. If these amount to or exceed 40 (e.g. 20 years paid contributions, 12 years HomeCaring credits and 8 years Jobseekers Credits), you qualify for a maximum rate pension (currently €238.30).
If however you have a lesser record, you would get a pro-rata amount.
For example, if you had 36 years (e.g. composed of 16 years paid contributions, 10 years HomeCaring credits, 10 years Jobseekers credits), your pro-rata entitlement would be 36 divided by 40, i.e. 90%. Whether this would be a greater or less amount than under the current system would depend on a number of factors, but whichever is the greater payment will be the one paid to you.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?