Voluntary PRSI contributions

E

eunrea

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Hi,

I am 57 years and since I began working I have been on class A stamp. I want to retire Dec 2025 I will be 58. For the next 6 to 7 years I want to buy voluntary PRSI contributions so that I get near to the top of the state pension when I reach 65-66 yrs.
I heard that the amount you need to pay for voluntary prsi contributions is based on the previous year so basically if I was on class A stamp how much money would I have to pay for the next year and the next 6 years. is there a formula for this?
Then my second question
if I did retire Dec 2025 from my class A stamp but then got a part-time job for the following year 2026 only would it be cheaper for me to buy voluntary contributions as the stamp wouldn't be A?
 
Will you have an ARF? If you make drawdowns this is counted as Class S PRSI.

Likewise if you have rental income it gets treated as Class S.
 
When you retire claim Jobseekers Benefit for 9 months. When the payments end continue to sign on for Jobseekers credits until you reach age 66. These credits are free of charge.

You are allowed up to 520 Jobseekers credits as reckonable for the Contributory Pension.

Any employment you take up after you retire will gain you a Class A contribution for each week where you earn a minimum of 38 euro.

Read this thread 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
 
eunrea said:
my second question
if I did retire Dec 2025 from my class A stamp but then got a part-time job for the following year 2026 only would it be cheaper for me to buy voluntary contributions as the stamp wouldn't be A?
Click to expand...

Why do you think that the stamp for part-time working wouldn't be an A?
 
eunrea
If you apply for Jobseekers Benefit at age 58 you will need to show that you are "available for and genuinely seeking employment" (ie a jobseeker).
Equally, even if "only" signing-on for credits, you also need to satisfy these conditions.
If you cannot meet these conditions (ie won't take a job offer, accept a training course etc) then you may not qualify for Jobseekers or credits.
 
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Don't be discouraged from applying for Jobseekers Benefit after reading the comment from the last poster.


Read through the link below.


Post 1995 Supplementary pension query

I retired in 2022 as reached compulsory retirement age (60), joined Garda in 1999, so had to go on jobseekers for 9 months, had to get refused job seekers allowance in order to get my supplementary pension from dept of justice. This Supplementary pension ( circa one third of my pension) is...
www.askaboutmoney.com
 
If you opt to make voluntary Prsi contributions, you would pay 6.6% of your previous years Class A earnings, subject to a minimum payment of 500 euro.

So assuming that you are earning more than 7575 euro, you will pay 6.6% of your earnings in year 1. (Year immediately after you retire)
If this year is not critical to you in reaching your target amount of Prsi contributions, you could skip voluntary contributions for this year and avoid the 6.6% cost.
You could begin your voluntary contributions the next year and only pay 500 euro.

If you are not in employment and have no Class A earnings in any of the following years you will pay 500 euro per year.

Bear in mind that voluntary contributions only cover you for the Contributory Pension.
Your would loose your treatment benefits and also eliminate the possibility of qualifying for Benefit Payment 65.

If you are claiming Jobseekers credits you would continue to receive treatment benefits and keep open the possibility to qualify for Benefit Payment 65.

You are allowed to claim Jobseekers credits and make voluntary Prsi contributions in any yearly period.
 
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S class said:
If you opt to make voluntary Prsi contributions, you would pay 6.6% of your previous years Class A earnings, subject to a minimum payment of 500 euro.

So assuming that you are earning more than 7575 euro, you will pay 6.6% of your earnings in year 1. (Year immediately after you retire)
If this year is not critical to you in reaching your target amount of Prsi contributions, you could skip voluntary contributions for this year and avoid the 6.6% cost.
You could begin your voluntary contributions the next year and only pay 500 euro.

If you are not in employment and have no Class A earnings in any of the following years you will pay 500 euro per year.

Bear in mind that voluntary contributions only cover you for the Contributory Pension.
Your would loose your treatment benefits and also eliminate the possibility of qualifying for Benefit Payment 65.

If you are claiming Jobseekers credits you would continue to receive treatment benefits and keep open the possibility to qualify for Benefit Payment 65.

You are allowed to claim Jobseekers credits and make voluntary Prsi contributions in any yearly period.
Click to expand...
Thank you for your response.
 
I'm considering spending half each year abroad and working 6/7 months in Ireland. Would aim to have contributions 7/8 months. I'd be employed by an agency PAYE.
Just wondering would I need to purchase credits for additional months.
I will barely make full pension. So want to have maximum contributions each year. TIA. Apologies if I posted on wrong thread or should have started new one.
 
You can't sign on for credits of you are not resident in Ireland.

You could pay voluntary contributions to make up your shortfall each year. You would still have pay the 6.6% of your previous years earnings or minimum of 500 euro.
 
I am not 100% sure.
If you work for the first 6 months of the year and then stop paying prsi you are out of the system for the remaining 6 months.

You can definitely pay voluntary for a part of a year.

It could be very expensive for the poster if he has paye income every year. He would have to pay 6.6% of each previous years earnings just to get 5 to 6 months contributions.

In fact it would probably be better if he could arrange to earn 38 euro per week from an Irish employer while he is out of the country.
 
What about setting up a company and paying yourself 38 euros per week, and pay the prsi on it, each month, would that allow you to get the stamps?
 
JohnMM said:
What about setting up a company and paying yourself 38 euros per week, and pay the prsi on it, each month, would that allow you to get the stamps?
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If you are not carrying out a trade this would be a sham for the purpose of accruing PRSI credits. I doubt this would be legal.

However many people have a friend or family with a business who could find them something productive to do for €38 a week.
 
JohnMM said:
What about setting up a company and paying yourself 38 euros per week, and pay the prsi on it, each month, would that allow you to get the stamps?
Click to expand...
Check out family employment and registering as an employer on revenue.ie.
A friend or family member could employ you to do housework, gardening, DIY repairs etc.

The only restrictions are that the employer cannot be your spouse and if the employer is living in the same house as you then the employment cannot relate to the house you are both living in.
 
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Dr Strangelove said:
If you are not carrying out a trade this would be a sham for the purpose of accruing PRSI credits. I doubt this would be legal.

However many people have a friend or family with a business who could find them something productive to do for €38 a week.
Click to expand...
Setting up a new business is fully legal, as long as it has legitimate purpose and I was not suggesting otherwise. Sorry if this was not clear.
 
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