Contributory State Pension

I

ivannomonet

Registered User
Messages
86
A question to you knowledgeable people, I have received my statement of paid credits from the DSP. It shows that I will surpass 2080 paid A1 contributions before my 58th birthday in less than two years time. My question, If I was to retire early using my DC pension scheme as income from 58 , would I be eligible for the full State Contributory pension at 66,67, or 68 whatever the age may be if I haven't worked for the 10 years prior to application but have paid over 2080 contributions in total?
I started working at 16 so have just short of 40 full years contributions at the minute.
 
ivannomonet said:
If I was to retire early using my DC pension scheme as income from 58
Click to expand...

What form will this income take?

Are you taking everything as a lump sum and living off that? Are you drawing an annuity? Will the income be from an AMRF/ARF/vested PRSA?

Your days of PRSI contributions may not be over!

You may be liable to PRSI at Class S until age 66 depending on the form of income.
 
I would be looking to take the the 25% tax free lump sum then the reminder from an ARF (and maybe an AMRF? if required).
 
ivannomonet said:
My question, If I was to retire early using my DC pension scheme as income from 58 , would I be eligible for the full State Contributory pension at 66,67, or 68 whatever the age may be if I haven't worked for the 10 years prior to application but have paid over 2080 contributions in total?
Click to expand...

As per the rules currently in place you would qualify for the full rate at whatever State Pension age. While we can't be sure the rules won't change within 10 years, it is a fair bet that 2080 paid conributions will still be sufficient. See the Aggregated Contributions Method here: https://www.gov.ie/en/publication/927721-state-pension-contributory-rates/
 
A distribution from an ARF will be subject to PRSI at 4% until age 66 under Class S.

Class S contributions count towards the contributory state pension.

If your ARF drawdown is €12,500+ in a tax year, you should get stamps on your social insurance record equal to 52S, regardless of whether you drawdown in one amount or monthly amounts.

If your ARF drawdown is less than €12,500, my understanding is that you need to make monthly drawdowns to get the full 52S on your social insurance record.

Irrespective of the PRSI paid on your ARF from your retirement age until age 66, if you reach pension age on or after 1 Sep 2012, you can be assessed for the contributory pension using the average method or the TCA method.

You have the full 2,080 contributions.

You have your statement from the DSP. It would be no harm to verify your understanding that you fully qualify with the DSP before you pull the trigger.
 
What does it matter if you have 2080 contributions or 1500,
you will still be subsisting on this income.
A diet of cream crackers and hot water.
What about funding your own retirement, a private pension?
I dont get this obsession with the state pension.
 
By the time you reach State Pension age the State Pension will be based on a Total Contributions Approach. You will get 1/40 of the State Pension for each year's Contribution.
 
Fresh-Start said:
By the time you reach State Pension age the State Pension will be based on a Total Contributions Approach. You will get 1/40 of the State Pension for each year's Contribution.
Click to expand...
The Total Contributions Approach is in operation right now - in parallel with the Averaging Approach.
 
If yo
fistophobia said:
What does it matter if you have 2080 contributions or 1500,
you will still be subsisting on this income.
A diet of cream crackers and hot water.
What about funding your own retirement, a private pension?
I dont get this obsession with the state pension.
Click to expand...
If you read my opening post I have a DC pension......The state pension would supplement that.
 
AAAContributor said:
A distribution from an ARF will be subject to PRSI at 4% until age 66 under Class S.

Class S contributions count towards the contributory state pension.

If your ARF drawdown is €12,500+ in a tax year, you should get stamps on your social insurance record equal to 52S, regardless of whether you drawdown in one amount or monthly amounts.

If your ARF drawdown is less than €12,500, my understanding is that you need to make monthly drawdowns to get the full 52S on your social insurance record.

Irrespective of the PRSI paid on your ARF from your retirement age until age 66, if you reach pension age on or after 1 Sep 2012, you can be assessed for the contributory pension using the average method or the TCA method.

You have the full 2,080 contributions.

You have your statement from the DSP. It would be no harm to verify your understanding that you fully qualify with the DSP before you pull the trigger.
Click to expand...

Curious on the two calculations for the SCP...... I thought the TCA was eventually meant to replace the Averaging method, are they intended to run in parallel (the higher of the two) indefinitely?
 
The Total Contribution Approach was meant to become the only calculation model in 2021, but this has been punted to the recently established Pensions Commission, as has the intended increase in the pension age to 67. We will just have to await the Commission report (due mid 2021) to see what they recommend.
 
fistophobia said:
What does it matter if you have 2080 contributions or 1500,
you will still be subsisting on this income.
A diet of cream crackers and hot water.
What about funding your own retirement, a private pension?
I dont get this obsession with the state pension.
Click to expand...
The state pension generally covers your basics of food, clothing , shelter,heat & electricity. It's good to have this in the bag. Your DC pension is then yours to to have the craic with or whatever you enjoy doing. The OP asks a good question.

2080 contributions should see him home and clear for the full contributory state pension.
 
Yes you will be eligible for full state pension assuming you have 40 full years contributions. Not contributing for last 10 years won’t have any relevance.
 
You must log in or register to reply here.
Back
Top