Contributory state pension

[bstop]

I don't think there is any prsi on state savings.

 

[Marsupial]

My income would be from 10 year state savings- would this incur class K?

 

[fayf]

I don't think there is any prsi on state savings.

Correct, there is no PRSI, PAYE or USC liability on state savings.

One of the most straightforward methods of maintaining your PRSI record is drawing from your ARF at a minimum of 12,500 pa, with an attached Class S 4% PRSI of €500 per annum, satisfying all PRSI requirements for maintaining 52 insurable weeks pa, re State Contributory Pension.

This can make sense, even if, you do not need the funds, it also utilises your annual tax free amount, which expires once a tax year is completed. A typical person would Pay, no USC or PAYE if their annual income was 12,500, indeed, the USC exemption amount is 13k, and someone with normal tax credits of 3,300 pa, is exempt from PAYE up to 16500. So even if one draws down 16,500 pa from an ARF, there is no PAYE, USC of just 150 pa, and PRSI of 660 pa, which is just under 5% total deductions - a good deal indeed. One could always invest those funds if they are not needed, or put them into something guaranteed, and non taxable, like state savings.

But ARF’s, are not always a possible route as depends on individual circumstances.

 

[november16]

Correct, there is no PRSI, PAYE or USC liability on state savings.

One of the most straightforward methods of maintaining your PRSI record is drawing from your ARF at a minimum of 12,500 pa, with an attached Class S 4% PRSI of €500 per annum, satisfying all PRSI requirements for maintaining 52 insurable weeks pa, re State Contributory Pension.

This can make sense, even if, you do not need the funds, it also utilises your annual tax free amount, which expires once a tax year is completed. A typical person would Pay, no USC or PAYE if their annual income was 12,500, indeed, the USC exemption amount is 13k, and someone with normal tax credits of 3,300 pa, is exempt from PAYE up to 16500. So even if one draws down 16,500 pa from an ARF, there is no PAYE, USC of just 150 pa, and PRSI of 660 pa, which is just under 5% total deductions - a good deal indeed. One could always invest those funds if they are not needed, or put them into something guaranteed, and non taxable, like state savings.

But ARF’s, are not always a possible route as depends on individual circumstances.

Hello Can I ask a few questions
Can a Civil/Public Servant avail of an ARF. Im pre-95, aged 60, retirement age 65 as per pre 95 public servant. Pension will amount to 14,000 approx at 65 for 28 years. Not entitled to A stamp (contributory pension). Had approx 7 yrs A rate stamp pre-public service.
Can property be part rented to gain entitlement to S stamp to build years re Contributory pension. If still working as Servant can the S stamp be built up whilst renting?

 

[NoRegretsCoyote]

Had approx 7 yrs A rate stamp pre-public service.

It would be good to get this to 10 years which will get you some contributory state pension at 66.

If you have investment income (dividends, profits on a rental property) of >€5k per a annum you pay €500k Class S PRSI or 4%, whichever is higher. This might be an option for you between age 60 and 65 to get you your ten years.

But without a wider picture of your personal and financial circumstances it's very hard to advise.

 

[november16]

Thanks NoRegretsCoyot
Ordinary Public Secor Worker no Dividends to speak of.
No rental property just own home, which I am considering if it is viable to rent for the next 5 years or more through necessity. It seems though from previous poster that if I got employment paying A rate contributory stamp and If I was in the position to rent then the S contributory would be cancelled out. If I am understanding it correctly.
Or If my only source of income was a pension and I rented and earned over 5,000 then the S stamp payment would become M and K as per previous poster of no benefit towards a contributory pension.
Can I be paying an A stamp (if I got employment) and also be employed paying the B rate Stamp (civil Service) previously paid D Public servant.

It would be good to get this to 10 years which will get you some contributory state pension at 66.

If you have investment income (dividends, profits on a rental property) of >€5k per a annum you pay €500k Class S PRSI or 4%, whichever is higher. This might be an option for you between age 60 and 65 to get you your ten years.

But without a wider picture of your personal and financial circumstances it's very hard to advise.

 

[NoRegretsCoyote]

It seems though from previous poster that if I got employment paying A rate contributory stamp and If I was in the position to rent then the S contributory would be cancelled out. If I am understanding it correctly.

Am still not sure I understand your circumstances precisely. Say for example you retire from public service at 60 and at 61 take up private sector employment until 65. You will pay Class A PRSI on this private sector employment until 65 and will build up stamps for a contributory state pension. In these circumstances no point in letting your house.

Or If my only source of income was a pension and I rented and earned over 5,000 then the S stamp payment would become M and K as per previous poster of no benefit towards a contributory pension.

I can't see any circumstances where you would pay either Class M or Class K.