In order to qualify for a State Pension (Contributory) you must be aged 66 and have enough Class A, E, F,G, H, N or S social insurance contributions.
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 entered social insurance before a certain age. For people currently under 66, they must have started to pay social insurance before the age of 56. The age limit is higher for people born before 1922.
Entry into insurance
Your
entry into insurance means the date on which you first started to pay social insurance.
The rules that determine when you entered into insurance are quite complex for those with mixed insurance, that is, full social insurance for some of the time and modified at other times.
Normally the date of starting insurable employment is taken as the date of the first paid employment contribution. However for a person who has a mixture of full and modified rate contributions and paid his/her first full-rate employment contribution before 6 April 1991, the most favourable date of starting insurable employment is taken. This means, if you first started to pay full insurance before 6 April 1991 and before you reached 56 years of age, your entry into insurance can be the date on which you first started to pay the full-rate of insurance if that would be to your advantage.
If you started to pay full insurance after 6 April 1991, your entry into insurance is the time you first paid any social insurance.
There are also special entry into insurance rules for self-employed people. If you started to pay self-employed contributions on 6 April 1988 and had previously paid employee insurance at any time, then the date of entry into insurance can be either 6 April 1988 or the date on which you actually first paid insurance, whichever is to your advantage.
Number of paid contributions
If you reached pension age before April 6 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 full-rate contributions (that is, full stamp prior to 1979 and Class A,E,F,G,H,N and S since then.)
If you reach pension age on or after 6th April 2002, you will need to have 260 paid contributions (effectively 5 years contributions but they need not be consecutive). However, if you were a voluntary contributor on or before April 6 1997, you need only have 156 paid contributions if you have a yearly average of at least 20 contributions.
If you reach pension age on or after April 6 2012, you will need to have 520 paid contributions (10 years 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 6 1997 and you have a yearly average of 10 contributions, you may meet the requirement if you have a total of 520 contributions, but only 156 need to be compulsory paid contributions.
Average number contributions per year
You must meet the average condition. This is probably the most complex aspect of qualifying for a State Pension (Contributory).
Normal average rule
The normal average rule states that you must have a yearly average of at least 10 appropriate contributions paid or credited from the year you first entered insurance or from 1953, whichever is later. An average of 10 entitles you to a minimum pension; you need an average of 48 to get the maximum 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 Class A, E, F, G, H, N or S contributions (paid or credited ) for each contribution year from April 1979 to the April before your 66th birthday. This average would entitle you to the maximum pension. There is no provision for a reduced pension when this alternative average is used.
So, if you reach the age of 66 on or after April 6 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 alternative average will probably be looked at first because it is easier to assess. If you do not have an average of 48 contributions 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 using the normal average rule).
Pro-rata pensions
There are a number of pro-rata pensions, which were introduced because of the exclusion of some people from the social insurance system at particular times.
Pro-rata pension for intermittent insurance
The first group for whom pro-rata pensions were arranged were those who had been in and out of insurance because of the operation of the income limit on contributions. Prior to 1974, non-manual workers were obliged to pay social insurance contributions only if their income was below a certain level. From 1 April 1974, there has been no income limit. Many people paid social insurance for a period and then ceased to pay when their income went above the limit then came back into the insurance system in April 1974 because of the abolition of the income limit . They would not meet the usual average requirement because they ceased to pay for a while. On 14 October 1988, arrangements were made for them to qualify for a pro-rata pension.
Their average is measured in the usual way and if that average is 10 or more they get a pension in the normal way. However, if it is between 5 and 9 they may get a special partial pension which is one quarter of the maximum pension. This pro-rata pension is payable to people who meet the quite specific conditions outlined. That is, you must have a broken insurance record and have re-entered insurance in 1974 because of the removal of the income limit. If you re-entered insurance in that year for any other reason (for example, because you had previously been self-employed or out of the country), you do not meet these specific terms and you would not be eligible for this pro-rata pension.
If you qualify for this pro-rata pension you may also get the appropriate Increase for Qualified Adult for a dependent spouse or partner and an Increase for a Qualified Child.
This pro-rata pension is for State Pension (Contributory) and
Widow’s/Widower’s (Contributory) Pension only. Because it is easier to qualify for a Widow’s/Widower's (Contributory) Pension the numbers who need the pro-rata pensions are very small. This scheme does not apply to State Pension (Transition).
Pro-rata pension for mixed insurance
The second group for whom pro-rata pensions were introduced are those with mixed insurance records, that is, people who worked for some time in the public sector and for a time in the private sector. The rules governing these pro-rata pensions are different from those described above.
Mixed insurance arises when a person spends part of his/her working life in the public service paying modified insurance and part in the private sector paying Class A (or, since April 1988, self-employed and paying Class S).
There are many people who have had a career in both the public and private sector but do not have mixed insurance. This is because no insurance was payable by people whose incomes were above certain limits before 1 April 1974. Certain groups who are now insured were outside the scope of the system - Gardai are insurable from 1 April 1974; certain members of religious orders from 6 April 1988 and doctors and dentists in the civil service from 6 April 1988.
People with mixed insurance may have enough full contributions to enable them to qualify for a State Pension (Contributory). This depends on the exact circumstances of each case. It could happen that one person would qualify while another, who might have more contributions, would not qualify.
Since 1991, a State Pension (Contributory) may be payable on a pro-rata basis to people with mixed insurance.
You must have:
- At least 260 paid contributions at the full rate since entry into insurance or 1953, whichever is later
- A mixture of full and modified contributions, which when added together give you a yearly average of 10 (for the State Pension Contributory) from the time you first entered insurance or 1953, whichever is later, to the end of the contribution year before your 66th birthday.
- Failed to qualify for a pension under EU regulations or under reciprocal arrangements with other countries or only qualified for a pension at a lower rate than this pro-rata pension would give you.
If you meet all these requirements, you may qualify for a pension proportionate to the number of contributions that you have at the full rate. To take a very simple example, if you worked for 40 years up to age 66 and 10 of those were in the private sector, you would get one-quarter of the normal pension.
If you reach pension age on or after 6 April 6 2012, you will need to have a total of at least 520 full and mixed contributions paid and at least 260 of these must be full contributions.
What happens to people with mixed insurance is that all contributions at the full and modified rates are added together. The average is then measured in the normal way. If you have an average of at least 10 then you may qualify. Then the number of full contributions is divided by the total number of contributions to find out what proportion are full rate; you then get that proportion of the pension.
The Increase for a Qualified Adult payable with this pension is proportioned as well.
Pro-rate pension for self-employed people
The self-employed have been obliged to pay social insurance since 1988. Prior to that, some self-employed people were voluntarily paying insurance.
Some self-employed people were already over the minimum age when they first started to pay contributions in 1988. In April 1999, a special pro-rate pension was introduced for them.
You may qualify for this pro-rate pension if:
- You were aged 56 or over on 6 April 1988 (born on or before 6 April 1932)
- You first started paying social insurance contributions as a self-employed person on or after 6 April 1988
- You have a minimum of 260 full-rate social insurance contributions paid on a compulsory basis since 6 April 1988, provided that the first contributions (since this date) are self-employment (Class S) contributions.
If you meet these conditions, you may get a pro-rata pension of half the normal maximum rate. The increases for a qualified adult and child are also at half-rate. The increase for pensioners over 80 years of age is paid in full.
Pro-rata pensions for people with pre-1953 contributions
This pro-rata pension was introduced in May 2000. You may qualify if you have at least 260 full contributions, some of which must have been paid before 1953. Every 2 contributions paid before 1953 count as 3.
If you meet these conditions, you may get a pro-rata pension of half the normal maximum rate. The increases for a qualified adult and child are also at payable at half-rate. The increase for pensioners over 80 years of age is paid in full.
Working in the Home and State Pensions
In 1994, regulations were made that should make it easier for people who take some time off work to care for family members to qualify for pensions. The
Homemakers Scheme is for people who have been carers since or after 1994. It does not affect those who were carers before April 1994 and it will not be of much use to those who give up work permanently. It is of greatest importance for those who work outside the home for a number of years, then spend a number of years as carers and then return to the workforce. It applies equally to women and men.
From 5 April 1994, any contribution year spent as a homemaker may be disregarded in the calculation of the yearly average up to a maximum of 20 years. So, the fact that you do not have any contributions in those years will not affect your entitlement to a pension.
EU pensions
If you have worked in Ireland and one or more EU state your social insurance contributions from each EU state will be added to your Irish social insurance contributions to help you qualify for a social welfare payment. More information about
combining your social insurance contributions to qualify for a state pension is available.
Increases for a qualified adult and pensioners over 80 years of age are calculated in the same way as the personal rate of pension. Increases for a qualified child are payable from one country only and, if from Ireland, are paid in full.
Bilateral social security agreements
Ireland has entered into
bilateral social security agreements with Canada, the USA, Australia, New Zealand, Switzerland, Austria and Quebec (which has a separate system from the rest of Canada). These agreements are broadly similar and they generally provide that social insurance paid in Ireland and the other country can be combined to help people qualify for old age and retirement pensions. Again, in general, the method of calculation is similar to the EU rules.
The Department of Social and Family Affairs published
"Working it out - A Guide to the Old Age Contributory Pension", it will help you to work out if you qualify for a State Pension (Contributory).