Missed 2024 pension changes by 11 days

[Dimarzio123]

Hi

I am 66 on 20/12/2023, so miss the 2024 changes by 11 days.

I have a partial career in IRL and intend to draw down (only) my IRL rights
I would like to continue to work and increase my contributions to fall within the next pension band - (average calculation method)

Currently my 2023 contributions are not being counted - only contributions till the last tax year before drawdown are counted.
Hopefully they would be in 2024 and I would also like to add a few more to bring me to the required average level.

The only rules that can find now are printed on my IRL contribution statement:

"the option to delay receipt of your State Pension Contributory at age 66 and, instead,
receive it from any age up to 70 (This option is available from 1/1/2024)"

My question: can I defer drawing my pension till 2024?

 

[S class]

Operational Guidelines: State Pension Contributory

www.gov.ie

Read the section regarding late claims.

There is nothing stopping you from delaying your pension claim into 2024.
There might be a danger if you late claimed, that backdated payments might be paid automatically.

If you delayed for just over 6 months into 2024 and claimed backdating for 6 months, this would guarantee that your pension could only be started in 2024. This might allow all your 2023 contributions to be counted as this was the last complete tax year before you started your pension.

The final partial year is not counted in the Prsi contributing lifespan devisor when calculating the yearly average. If you managed to get 2023 added as a contributing year you would increase your divisor by 1 and thereby decrease your yearly average.

I doubt that you get any extra contributions beyond 2023 as you miss the deadline. Even if you did you would be adding another extra year to your divisor.

It might or might not work.
Worst case is you would lose 2 weeks pension for remainder of 2023.

Have you allowed for possible rounding up of your yearly average ?

For instance if your yearly average was 14.5 it would be rounded up to 15.

Have you also counted in Pre Entry Credits ?

These are not shown on your Prsi record but are counted as reckonable for the contributory pension.

 

[moneymakeover]

Hi

I am 66 on 20/12/2023, so miss the 2024 changes by 11 days.

I have a partial career in IRL and intend to draw down (only) my IRL rights
I would like to continue to work and increase my contributions to fall within the next pension band - (average calculation method)

Currently my 2023 contributions are not being counted - only contributions till the last tax year before drawdown are counted.
Hopefully they would be in 2024 and I would also like to add a few more to bring me to the required average level.

The only rules that can find now are printed on my IRL contribution statement:

"the option to delay receipt of your State Pension Contributory at age 66 and, instead,
receive it from any age up to 70 (This option is available from 1/1/2024)"

My question: can I defer drawing my pension till 2024?

What's IRL?

 

[S class]

What's IRL?

Ireland.

 

[Dimarzio123]

Read the section regarding late claims.

There is nothing stopping you from delaying your pension claim into 2024.
There might be a danger if you late claimed, that backdated payments might be paid automatically.

If you delayed for just over 6 months into 2024 and claimed backdating for 6 months, this would guarantee that your pension could only be started in 2024. This might allow all your 2023 contributions to be counted as this was the last complete tax year before you started your pension.

The final partial year is not counted in the Prsi contributing lifespan devisor when calculating the yearly average. If you managed to get 2023 added as a contributing year you would increase your divisor by 1 and thereby decrease your yearly average.

I doubt that you get any extra contributions beyond 2023 as you miss the deadline. Even if you did you would be adding another extra year to your divisor.

It might or might not work.
Worst case is you would lose 2 weeks pension for remainder of 2023.

Have you allowed for possible rounding up of your yearly average ?

For instance if your yearly average was 14.5 it would be rounded up to 15.

Have you also counted in Pre Entry Credits ?

These are not shown on your Prsi record but are counted as reckonable for the contributory pension.

Thanks for a very comprehensive reply. Much appreciated.

Re: the late claims - I have previously contacted the pension authority (state.con at welfare.ie). The wording on the rule seems to be locked to my birthday. So not sure how a late claim would be interpreted.
"from the applicant’s date of entry into insurable employment, to the end of the last complete tax year preceding their 66th birthday"

My average is 18.8, my total is 848 with 45 years career counted. The contribution statement total now seems to include the pre-entry contributions.
I am missing 30 to get to 19.5 average
It is too late to purchase additional contributions.
I will request an update from the dept to see if they have any power to grant discretionary contributions - not optimistic though.
Thanks once again.

 

[S class]

Thanks for a very comprehensive reply. Much appreciated.

Re: the late claims - I have previously contacted the pension authority (state.con at welfare.ie). The wording on the rule seems to be locked to my birthday. So not sure how a late claim would be interpreted.
"from the applicant’s date of entry into insurable employment, to the end of the last complete tax year preceding their 66th birthday"

My average is 18.8, my total is 848 with 45 years career counted. The contribution statement total now seems to include the pre-entry contributions.
I am missing 30 to get to 19.5 average
It is too late to purchase additional contributions.
I will request an update from the dept to see if they have any power to grant discretionary contributions - not optimistic though.
Thanks once again.

You seem to be snookered.
Are there any unemployment gaps in your Prsi record where you did not claim credits ?
If so make a case to get these gaps filled.

 

[S class]

from the applicant’s date of entry into insurable employment, to the end of the last complete tax year preceding their 66th birthday

How to calculate your State Pension (Contributory) rate

How to calculate your State Pension (Contributory) rate using the Contribution Statement available on MyWelfare

www.gov.ie

Have a read through this.

In the section about calculating the contributions counted for the averaging system it states....

Count all the Reckonable Contributions and Reckonable Credited Contributions (Column 7) on your Contribution Statement, from your date of entry to the last completed tax year before your chosen pension drawdown date.

In the worked example it states

This is an example of a person born in 1957.


It also states....

In 2005, they returned to part-time employment, continuing to work until they retired from work in 2022 and they have chosen age 66 as their pension drawdown date,

This means that a person born in 1957 was allowed to choose their retirement age and that in this case they chose age 66. The implication is that they were free to choose a different date. It also means that all Prsi contributions should be counted up to the last completed tax year before their chosen pension drawdown date. If this person had decided to choose a date beyond the end of the year of their 66th birthday as their pension drawdown date their full years Prsi contributions for age 66 must be counted.

 

[Dimarzio123]

Update : I contacted my local Sinn Fein deputy who contacted the pension authority on my behalf.
No good solution for me, unfortunately, but this might clarify for others in a similar situation.

"Dear Deputy

I refer to your representation on behalf of Mr xxx.

The upcoming changes offering flexibility on pension draw down dates is only available to those born on or after 01/01/1958. There is no exception to this.

While the contributions paid in 2023 will not be included in the Yearly Average calculation for Mr xxx,
under the Total Contribution approach, we can include all paid contributions up to the week before he reaches pension age.
This may help him reach a higher rate.

I hope this clarifies the position."

 

[Kev1964]

Update : I contacted my local Sinn Fein deputy who contacted the pension authority on my behalf.
No good solution for me, unfortunately, but this might clarify for others in a similar situation.

"Dear Deputy

I refer to your representation on behalf of Mr xxx.

The upcoming changes offering flexibility on pension draw down dates is only available to those born on or after 01/01/1958. There is no exception to this.

While the contributions paid in 2023 will not be included in the Yearly Average calculation for Mr xxx,
under the Total Contribution approach, we can include all paid contributions up to the week before he reaches pension age.
This may help him reach a higher rate.

I hope this clarifies the position."

Interesting and thanks for sharing. Perhaps the change to include “paid contributions up to the week before pension age” has been introduced along with flexible retirement dates.

 

[S class]

Interesting and thanks for sharing. Perhaps the change to include “paid contributions up to the week before pension age” has been introduced along with flexible retirement dates.

They must have been allowable before the new changes otherwise Dimarzio123 would not be allowed them.

 

[Marsupial]

Perhaps the change to include “paid contributions up to the week before pension age” has been introduced along with flexible retirement dates.

The words "total" and "contributions" in the "Total Contributions Approach" have always meant that all of an applicant's reckonable PRSI Contributions (up to the limits of 52 per year and 2080 in all) are included in the pension calculation!

 

[Kev1964]

The words "total" and "contributions" in the "Total Contributions Approach" have always meant that all of an applicant's reckonable PRSI Contributions (up to the limits of 52 per year and 2080 in all) are included in the pension calculation!

Kinda makes sense when you put it like that.