Topping up PRSI contributions for full state pension (after 2034)

Hi everyone. I will reach a pension age in 2037 (which is after 2034 - when the new pension rules will have exclusively replaced the previous system).

Since I arrived and started working in Ireland in 2016 - and given full PRSI contributions paid or credited every year - I can tot up a maximum of 1092 (out of 2080 contributions required to get full pension). No matter what I do - my pension is at max a 142 Eur per week (in todays money) when I am 66.

Is there any way under the new system to 'fill in' the gap or top up the contributions ? I still have some 13 years time to do sth - but what to do?

I think that paying 'voluntary contributions' is not an option as I will continue to pay PRSI as I go until 2037 (and will not be outside the sompulsory system - which si a requirement). It is the years that I worked elsewhere that I need to pay for here (if possible) - and I know already that I have no pension credits transferable to Ireland from where I worked before (its complicated but its the laws of the other states rather than Ireland) So - is there a way to 'top up' my PRSI contributions before I retire?

This question concerns thousands of immigrant workers who came here in their 40s and will not have enough years to get a liveable income? Is there a way?

P.S. An additional poit of interest. What will happen to non-contributory pensions in 2034 and after. If they stay at current rate (near the 'full contributory pension rate') - many people who will end up with woeful 'contributory pensions' (and pass means test) may just go for non-contributory pensions then. Will they be able to choose which pension they apply for?

paradidomes said:

Is there any way under the new system to 'fill in' the gap or top up the contributions ?

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Where did you work before and for how long? EU is automatic and there are bilateral social security agreements with a lot of places.

Re your additional point of interest - the situation at present is that if a person qualifies for a low-rate contributory pension and a higher-rate non-contributory pension, the higher of the 2 will be paid. There may be reasons for a customer choosing the low-rate contributory pension (e.g. if the person continued to work, it could affect the means test for non-con), but in general, the Department operate on the basis of allowing whichever pension gives the higher amount to the customer.

Dr Strangelove said:

Where did you work before and for how long? EU is automatic and there are bilateral social security agreements with a lot of places.

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It was Poland - but the type of employment I worked under was 'umowa zlecenie' (or: 'per project basis - cannot really find an equivalent in law or in terminology) and this type of 'employment scheme' attracted all kinds of levies or taxes but neither of these would qualify as PRSI. So I worked a number of years as freelance and I was cumulatively taxed at 20-30% level but neither of them was a 'PRSI or pension type contribution' .... I do not want to get into this (thats why I wrote its complicated). Bottom line - - I did not sit on my a..... for all these years before coming to Ireland but I cannot transfer them as creditable over here. (and much of this time was even before even Poland joined the EU and reformed their laws to conform with EU standards).

My question is. I will only have 21 years of contributions when I am 66. And my pension will be 630 Euro. Can I do anything to top it up whilst I am still before 66? Pay some form of lump sum contributions next to my current ones? I cannot find any naswer on this online? Or I am stuck with it?

What about people who entered the system late as I did - there must be a percentage of population affected and there surely must be a policy solution here to bring their pension to a 'liveable' or 'sustenance' level (or am I wrong)?

paradidomes said:

It was Poland - but the type of employment I worked under was 'umowa zlecenie' (or: 'per project basis - cannot really find an equivalent in law or in terminology)

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Sounds like some sort of "contractor" or self employed role?

paradidomes said:

Can I do anything to top it up whilst I am still before 66? Pay some form of lump sum contributions next to my current ones?

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Check if you are entitled to any credits or could make voluntary contributions perhaps?

paradidomes said:

What about people who entered the system late as I did - there must be a percentage of population affected and there surely must be a policy solution here to bring their pension to a 'liveable' or 'sustenance' level (or am I wrong)?

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The assumption is that people who only started contributing into the Irish PRSI system later in life will either have have contributed into some other country's PRSI system before they came to Ireland [as mentioned above, Ireland has bilateral social security agreements with a lot of other countries] or will have contributed to some form of private pension.

The alternative for people who aren't eligible for a 'liveable' state contributory pension, is to apply for the state non-contributory pension.

paradidomes said:

will only have 21 years of contributions when I am 66. And my pension will be 630 Euro. Can I do anything to top it up whilst I am still before 66?

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No. You can delay retirement up to age 70 and keep contributing. You might be better off that way.

It’s worth an exhaustive check of the regime in Poland. Seems strange that taxed employment for many years would give rise to zero pension or transferable credits.

paradidomes said:

here to bring their pension to a 'liveable' or 'sustenance' level (or am I wrong)?

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Yip, it’s the non-contributory pension which is means tested. You get whichever is more beneficial to you.

But don’t stress this. You have 13 years to prepare. Do you have a private pension In Ireland? If not it’s worth starting one and you will get great advice here on AAM.

You can pay voluntary prsi up until your 70th birthday. This is charged at 6.6% of your previous years class A earnings or a minimum of 500 euro.
You have to defer your pension beyond age 66 to do this. For each year deferred the amount of pension also rises.
So you would gain extra contributions and an extra portion of a larger pension.

You can also remain in employment up to age 70 to gain extra contributions.

You can also use an ARF to gain extra contributions up to age 70.

Check here for more information.

S class said:

You can pay voluntary prsi up until your 70th birthday. This is charged at 6.6% of your previous years class A earnings or a minimum of 500 euro.
You have to defer your pension beyond age 66 to do this. For each year deferred the amount of pension also rises.
So you would gain extra contributions and an extra portion of a larger pension.

You can also remain in employment up to age 70 to gain extra contributions.

You can also use an ARF to gain extra contributions up to age 70.

Check here for 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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OP said that he is in employment and will stay in employment. So voluntary contributions are not an option for him at the moment.
I also noticed that OP came here in 2016. So he has not reached 520 paid contributions yet- that puts him out of the voluntary option as well. You need 520 paid contributions before you can sign up for the voluntary option. Credits won't help.
OP talks about having contributions and credits. Given the time frame he is probably a good bit away from entering the voluntary thing anyway.
At this very moment OP has zero rights for even a part contributory pension.
The first thing he needs to do is to concentrate on building his contribution record up to reach the 520 minimum contribution line.
If there are absolutely no contributions in Poland he can use for going for a future pro rata EU pension I see no way whatsoever to accumulate enough contributions and credits to get a higher contributory pension than a non contributory pension.
A building up of a private pension in conjunction with a part contributory pension might be the way out to prevent him from ending up on the non contributory pension.

He has 13 + years to gain extra paid contributions. He won't have any problem reaching 520 full rate paid.

Judging by his post he has a very good grasp of the Irish Prsi system.

I was advising him that he has the opportunity to increase his Prsi record beyond age 66.

ClubMan said:

Sounds like some sort of "contractor" or self employed role?

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Yes. Precisely. Some sort of 'contractor' in Irish terms I guess. The weird thing was that I had 'withholding tax' deducted (automatically by the 'employer') from my pay (and did not have to file tax returns) but I did not have to register with Polish Revenue as self-employed - because technically I was not - I did work for a company but doing 'projects' rather than 'employment work' and I had no social contributions paid out of my deductions (which were hefty already). It included basic medicare. But not p;ension credits. It was thoroughly unfair - and perhaps there was a way to start a private pension - but honestly I could not afford it then (already paying some 20-30 per cent in different 'taxes') and I was in my 20s/30s and pension was so much 'far out' then and there.

ClubMan said:

Check if you are entitled to any credits or could make voluntary contributions perhaps?

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I guess I will or will look for a pension adviser. I wonder if the 'auto-enrollment' scheme (due to start in 2025) will offer any parallel saving platform to boost the pension (next to ccontinuing PRSI). It may be a separate thread for discussion here though. So far there is no algorithm or calculator to say how much you will pay and what the yield in terms of added pension will be. There is mixed opinions on elgibility too. Some sources say it is for employees only ('opt in' by default) other say that self-employeds can join (voluntary 'opt in'). I am confused already. But thanks anyways for the guidance. Every little helps

I wouldn't bank on the AE scheme being in place anytime soon. Its been delayed again and again.