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State Pensions
Qualified Pay Related Social Insurance (PRSI) contributors
are entitled to a contributory retirement pension (if they
have retired by age 65) or an old age pension (payable from
age 66). A surviving spouse's pension is payable if a qualified
contributor dies, either before or after retirement. Pensions
consist of a personal entitlement and dependants' allowances
(allowances for adult dependants are means tested).
Means tested non-contributory pensions are not relevant to most people
working in pensionable employment.
The following are the State Pension payment rates, applying to PRSI
contributors, with effect from January 1st 2007.
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RATES OF PAYMENT-Maximum Weekly Rates
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€
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Retirement/Old Age (Contributory) Pension
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Age 66 up to age 80
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209.30
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- aged 80 and over
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219.30
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The State benefits are generally taken account of, in the design of
occupational pension schemes. So the total benefit that is
provided usually includes the payment of the State Pension.
The process of taking account of State Pensions is known as
'integration'.
Generally employee contributions are lower when the State Pension
is integrated with a company scheme.
The following is from the State Oasis Public
Information Service
Retired
Being "Retired" means that you must not be in insurable
employment or self-employment. That means that if you have
earnings, they must be less than €100 a week from employment
or €5,200 a year from self-employment. If you have an income
from savings or investments, you could be liable for self-employed
PRSI but that would not debar you from a Retirement Pension
if you are not actually engaged in self-employment.
This condition ends when you reach the age of 66. At that
stage, you may have earnings from any source without affecting
your entitlement to Retirement Pension.
Social Insurance Contributions required
You need to
- have paid social insurance contributions before a certain age
- have a certain number of social insurance contributions paid,
and
- have a certain average number over the years since you first
started to pay.
Paid insurance before a certain age
You must have first started to pay social insurance contributions
before the age of 55.
Number of paid contributions
If you reach pension age before April 6th 2002, you must have 156
qualifying paid contributions (a total of 3 years but they
do not have to be consecutive). This means that you must have
actually paid contributions at the appropriate rate (i.e.,
full stamp prior to 1979 or Class A,E,F,G,H,N since then).
If you reach pension age on or after April 6th 2002, you will need
to have 260 paid contributions - effectively 5 years contributions
but they need not be consecutive.
If you reach pension age on or after April 6th 2012, you will need
to have 520 paid contributions. In this case, not more than
260 of the 520 contributions may be voluntary contributions.
However, if you were a voluntary contributor on or before
April 6th 1997, you may meet the requirement if you have a
total of 520 contributions but only 156 need to be compulsory
paid contributions.
In some cases, contributions paid before 1953 into the then National
Insurance scheme may be taken into account in order to satisfy
the requirement that you have 156 paid contributions. In fact,
each 2 such contributions are counted as 3. But, if they are
taken into account, the average must be measured from 1953.
Average contributions per year
You must meet the average condition. This is probably the most complex
aspect of qualifying for pensions and it is the one that gives
rise to the greatest problems and anomalies.
Normal "average" rule
The normal average rule states that you must have a yearly
average of at least 24 appropriate contributions paid or credited
from the year you first entered insurance or from 1953, whichever
is later. An average of 24 entitles you to a minimum pension;
you need an average of 48 to get the full pension.
"Alternative" average rule
This alternative average only applies to people who reach pension
age on or after 6 April 1992.
It requires that you have an average of 48 contributions
(paid or credited) per contribution year from April 1979 to
the April before your 65th birthday. This average would entitle
you to a full pension. There is no provision for a reduced
pension when this alternative average is used.
So, if you reach pension age, i.e. 66 on or after April 6th
1992, your average will be looked at in two ways - the usual
average will be assessed and the alternative average will
be assessed. Most employed or formerly employed people will
be able to meet the alternative average. The date of April
1979 has been chosen because that was the time that pay related
social insurance was introduced. The alternative average will
probably be looked at first because it is easier to assess.
If you do not have an average of 48 from 1979 then the usual
method of assessing the average will be looked at and you
may get a reduced pension (if you do not meet the alternative
average it is virtually impossible for you to have an average
of 48 on the usual method).
Contributions paid in another EU Member State
If you have paid social insurance contributions in another EU member
state, these can be employed to help you qualify for a retirement
pension.
The above page figures are correct as at 01/01/2007
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