Can a retired PAYE worker use class S contributions to qualify for Benefit Payment 65.

[Zeus2020]

Ah thank you so much for you replying and making it so clear

 

[fistophobia]

Anyone find they are missing PRSI stamps for 2024 ?
Each year I have to chase this, and almost fight the DSP section.
104 class-S contributions is what I should have.

 

[S class]

Class S deducted in the PAYE system for 2024 e.g. ARF drawdowns will appear on your record in early 2025.

Class S paid through the self assessment system for 2024 e.g. self employment, rental and investment income will not appear on your record until early 2026.

 

[redstar]

If using ARF drawdowns of e5000 per year to gain 52 Class S 'stamps', can this be done with multiple ARFs where the drawdown from EACH ARF is < 5000, but the total of the drawdowns = 5000?

Would a drawdown of < 5000 on each ARF be too low for paying PRSI ?

 

[ClubMan]

can this be done with multiple ARFs where the drawdown from EACH ARF is < 5000, but the total of the drawdowns = 5000?

I'm fairly sure that this works - i.e. once the cumulative amount taken from an ARF (or vested PRSA) is >= €5K then you get the 52 class S contributions.

 

[S class]

Would a drawdown of < 5000 on each ARF be too low for paying PRSI ?

Prsi is automatically deducted from every drawdown by the ARF provider. It is currently 4.1%. This is deducted no matter how small the ARF drawdowns are.

Provided you have total drawdowns of at least 5k it doesn't matter how many ARFs are included.

The 52 class S should automatically appear on you Prsi record early in the following year. If they don't, you should contact DSP.

 

[S class]

The appeal decision for @Gettinolder confirms that a ceased ARF is allowable as a ceased self employment in order to qualify for a JBSE claim.

I changed my ARF to a new broker recently.

The change resulted in the closing of my existing ARF and the opening of a completely new ARF.

The new ARF had a different policy number and it was revalued for deemed drawdowns based on the value at the change date, rather than the value of the previous ARF on the preceding 30th November.

As an existing ARF policy can be closed, I would assume that more than one replacement ARF could then be set up.

If this is allowed, a second small ARF could be added.

This small ARF could then be ceased to allow qualification for JBSE or BP65SE.


Post in thread 'Class S PRSI from ARF for JSB'

Class S PRSI from ARF for JSB

"If I was to cease drawing down from the ARF, I would have to fully draw it down in one go and get a letter from the ARF provider to confirm this"

 

[S class]

To clarify the rules to qualify for BP65 under the class S rules, using an ARF as the only self employment source.

A person must have a minimum of 156 class S contributions or
104 class A contributions.

A person must have 52 class S contributions in the calendar year of their 63rd birthday.

They need to then cease an ARF before the date of their 65th birthday.

 

[redstar]

If a PAYE worker has taken early retirement and has ARF drawdowns over 5k per year they will get 52 class S contributions per year.

If this person doesn't meet the class A rules in their governing year but does have 52 class S contributions in their governing year for BP 65 they meet one of the qualification rules for Benefit Payment 65 self employed.

In order to qualify for BP65SE they need to have ceased a self employment at any time later than the beginning of the calender year of their 63rd birthday.

To summarise, i think (!).....

A PAYE worker who qualifies for BP65 on the basis of Class A contributions will get BP65. Even if they are drawing from an ARF, as their Class S contributions here are not needed to qualify.

A PAYE worker who DOES NOT qualify for BP65 on the basis of Class A contributions AND is drawing enough from an ARF to gain reckonable Class S contributions, will not qualify if they do not cease the ARF.

A PAYE worker who DOES NOT qualify for BP65 on the basis of Class A contributions AND is drawing from an ARF, to gain Class S contributions, will qualify for BP65SE if they cease the ARF before they make their claim, but ensure they meet the Class S qualifying rules (GCY etc..).

 

[mmclo]

I'll cease my PAYE employment the year I turn 60

Wait until 61 and the issue goes away as the 13 paid A class in that year qualify you for BP65 along with credits for the other years

 

[michaelm]

My updated plan is to work till 31st March the year I will turn 61 (re 13 paid class A PRSI) and sign for credits only thereafter (year I turn 63 being the important one). That should qualify me for BP65. As my AVC won't have much in it I may exhaust it before 65, having generated 52 class S the year I turn 63, so as to have a punt at BP65SE in the event that my BP65 application hits any snag.

 

[Giggs11]

You can also cease Class K, (rental income) rather than the ARF to qualify. Selling your rented house is a bit drastic for a circa €12k benefit, but it may suit some who want to sell up anyway as they get older.

 

[S class]

You can also cease Class K

Class K income is not self employment, so ceasing this won't work.

However if a person has an ARF their rental income will almost certainly be class S and is self employment, so in this case ceasing a rental would work.