Contributory Pension Avg per year query

R

RugbyBoy

Registered User
Messages
146
Hi All,

I left Ireland shortly after graduating and returned to live here about 13 years ago. I am in my late 40's I have been working and paying PRSI since returning.

I am trying to figure out how the average number of contributions effects me. I worked some summer jobs and part time jobs in college so is this considered the year I "entered insurance"
So the 20+ years I was away get included in the average weighting?

Hopefully somebody knows how this works!

Thanks
RB
 
Ring the welfare and get them to work it all out for you. They will have the exact dates and contributions for you.
 
I rang the Welfare line and the automated message said they dont give individual forecasts.
 
In reply to your main question - yes, the years you were away will be included in the average calculation. If you were in an EU (and some other) country, you may be able to get credits towards your Irish state pension to include in the average calculation. The system penalises those who start work early and/or have breaks in their contribution records.

However, the plan is to move to a total contributions approach and given your age, it should be up and running by the time you retire. The new 'total contributions' approach is scheduled to start in 2020 - you get some pension after 10 years of contributions and a full pension with 30 years contributions.

http://www.welfare.ie/en/downloads/nationalpensionsframework_en.pdf

Page 21 (30 of the pdf):
A „total contributions approach‟ will be adopted to replace the current averaging system. The level of pension paid will be directly proportionate to the number of social insurance contributions made by a person over his or her working life. This will remove the current anomaly whereby some people qualify for higher pension payments even though they may have fewer contributions (but a higher average) than others who do not qualify, or qualify for a lower pension, due to the average contribution test.
Click to expand...
 
Thanks for all the help.

My wife is from the EU and moved here with me and started work the same time. does her average only start from the year she arrived and started work?
 
Yes, you have highlighted a little-known aspect of the SI system.

If you make even 1 weeks cont aged 16/17, then the clock starts ticking.

If you apply for the CSP at age 66, then the denominator of your average is 50 years.
 
3. Average number of 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 to the end of the tax year before you reach pension age (66). 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 the 1979/80 tax year to the end of the tax year before you reach pension age (66). 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 normal 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).
 
Thanks guys for all the great advice.
Maybe I should have got a new PPS no when I returned :)
 
Protocol said:
Yes, you have highlighted a little-known aspect of the SI system.

If you make even 1 weeks cont aged 16/17, then the clock starts ticking.

If you apply for the CSP at age 66, then the denominator of your average is 50 years.
Click to expand...

Hi Protocol,

I thought that too, but as I understand it there may be an out in relation to periods where one is in full-time education.

I am far from an expert in this area however.

Gordon
 
If the OP is in his late 40's then the new post 2020 system (or some subsequent system) will apply.
So if you have 30 years of contribution you will get the full State Pension. If less than 30 years then a strictly proportionate pension will be paid. Based on the original post it looks like the OP will have close to 30 years contributions.
The current "totals and averages" system is due to finish in 2020.
 
Conan said:
So if you have 30 years of contribution you will get the full State Pension. If less than 30 years then a strictly proportionate pension will be paid
Click to expand...

I know the government at one stage accepted a report for a change along these lines (even allowing for up to 10 of the 30 years of contributions to be credited) but has there been any actual confirmation of the changes taking place - or of the date ? Until it is confirmed, I am inclined to expect that the principle will be accepted but that the detail could be considerably different (and less generous) than was recommended.
 
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