Voluntary PRSI payments advice? To cover gap in contributions

PatrickG

PatrickG

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Hello,
Looking for any advice or feedback thanks!

In 2021 I left regular employment to start a startup. Been in regular employment making PRIS contributions for 15 years.

I lived off my savings and my wife was working luckily.

However I have 6 months on 2021 where I did not make PRSI payments.
Plus 9 months in 2022 and 6 months in 2023.
The start up did not generate much in the way of revenue. In hindsight not the wisest of decisions. And I reckon I should have gone on job seekers to keep up the PRSI payments. Alas I was a fool.

So I have a gap in my PRSI contributions history and I recently learned that this will affect my state pension when I retire.

I see there is a way of making voluntary PRSI contributions to cover those gabs if I understand correctly.

Can anyone share or advise how best I can tackle this?

Thank you
 
Let's look at it from a somewhat different perspective!

To be eligible for the full State Contributory Pension, you will need to have a total of 2080 reckonable contributions on your PRSI record by the time you reach pension age (which can be any age between 66 and 70). [2080 is 40 years X 52 contributions]

From what you have written, your PRSI record will show at least 780 paid reckonable contributions from employment (15*52) plus the 65 you made in 2021-23, a total of 845. (You may also have reckonable credits, but you'll need to get your PRSI record to establish this)
So that leaves you needing to make another 1,235 reckonable contributions before you reach pension age. (That's about 24 years of PRSI).

The youngest age at which you can claim the State Contributory Pension is 66 (the oldest is 70). So, if you're currently aged 41 or younger and you pay PRSI every year until you reach 66, then you'll accumulate enough to ensure that you have a full pension.

But that's a minimalist approach, and if things go wrong, you may not be able to pay PRSI every year, leaving you short of contributions and making you continue to work after you have turned 66, which may not appeal to you.

So the advice is to accumulate as many PRSI contributions as you can at the current time, which will give you more options as you get older.

To make voluntary contributions, you need to complete the VC1 form (LINK) (which is short and easy to understand) and send it to the address on the Form. Social Welfare will reply in a few weeks time and tell you what you will need to pay them in respect of each year. (The Form asks you what years you want to pay for and whether you want to continue making VCs annually). Before you set off, you might start by getting a copy of your PRSI record (LINK) and seeing exactly where you stand. There's no hurry, you can apply to make VCs for up to 5 years previously.

Here's the Citizens Information page about making VCs:

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 www.citizensinformation.ie
 
If you are in PAYE employment and gaining class A Prsi contributions, you should sign on for Jobseekers benefit or class A credits during any period of employment. This will ensure that you get 52 reckonable Prsi contributions per year.
 
Thanks for taking time to review my query. Very helpful.

It has really helped me focus on what I need to do and given me some perspective.

I've reached out to get a copy of my PRSI record and we'll go from there.

Once again. Thanks you.
 
Can you make voluntary contributions if you were outside the country? Worked in Ireland circa 1990-1993, UK 1993-2020, Ireland mid 2020 to present. Can I make 5 years back from mid 2020. I thought legislation had changed and that I couldn't make prior contributions any more?
 
Chewbacca said:
Can you make voluntary contributions if you were outside the country? Worked in Ireland circa 1990-1993, UK 1993-2020, Ireland mid 2020 to present. Can I make 5 years back from mid 2020. I thought legislation had changed and that I couldn't make prior contributions any more?
Click to expand...
I believe the limit is 5 years. I don’t think your residency during this period matters but I could be wrong.

So 2018 is the earliest year that you can apply for now and it must be applied for before 01.01.24. Complete the form (possibly called VC1) and send it by post of email. Email is the easiest way of proving that you sent it before the deadline. I seem to recall that there may be exceptions to the 5 year rule with approval from the minister.
 
Chewbacca said:
Can you make voluntary contributions if you were outside the country? Worked in Ireland circa 1990-1993, UK 1993-2020, Ireland mid 2020 to present. Can I make 5 years back from mid 2020. I thought legislation had changed and that I couldn't make prior contributions any more?
Click to expand...

Do you meet these conditions:-

In order to be admitted as a voluntary contributor, a person must:
  • have at least 520 weeks* PRSI paid under compulsory insurance in either employment or self-employment, if seeking admittance from a date on or after 6th April 2015,
AND
  • apply within 60 months (5 years) after the end of the contribution year during which they last paid compulsory insurance or during which they were last awarded a credited contribution. In very exceptional circumstances, this period may be extended at the discretion of the Minister
  • submit an application to the above address, using the Form VC1
*468 weeks are required for admittance between 6th April 2014 and 5th April 2015
364 weeks are required for admittance between 6th April 2013 and 5th April 2014
260 weeks are required for admittance before 6th April 2013

LINK: https://www.gov.ie/en/publication/47cee2-operational-guidelines-prsi-prsi-voluntary-contributions/
 
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