Employed just before 65th Birthday - State Pension Transition

[allendog]

Hi,
I'm querying on behalf of my husband who had been on Jobseekers Benefit until it ran out last May. As he'll be 65 in Dec. 2007, he, having had paid PRSI contributions for over 40 years, sent off an application form for State Pension (Transition). Two weeks ago, he commenced a part-time job (15 hours, around E250 p.wk). The dilemma is - the rules re eligibility for drawing on State Pension (Transition) are that he would be allowed to earn up to E38 per week and retain the SPT until the age of 66, when he'll transfer over to the State Pension (Contributory). By then he could work and earn as much as he could wish and receive the full SPC. That's a ridiculous situation. It's a tough decision - whether he would have to stop working once he reaches the age of 65 next December or sacrifice the SPT.
Any views?
allendog

 

[pat127]

Hi,
I'm querying on behalf of my husband who had been on Jobseekers Benefit until it ran out last May. As he'll be 65 in Dec. 2007, he, having had paid PRSI contributions for over 40 years, sent off an application form for State Pension (Transition). Two weeks ago, he commenced a part-time job (15 hours, around E250 p.wk). The dilemma is - the rules re eligibility for drawing on State Pension (Transition) are that he would be allowed to earn up to E38 per week and retain the SPT until the age of 66, when he'll transfer over to the State Pension (Contributory). By then he could work and earn as much as he could wish and receive the full SPC. That's a ridiculous situation. It's a tough decision - whether he would have to stop working once he reaches the age of 65 next December or sacrifice the SPT.
Any views?
allendog

What is your query exactly? A view on whether he should stay at work or not? If that's it, you can reach your own conclusion by doing the sums (Pension + Qualified Adult rate if applicable + €38 allowance) and compare with the €250 he would otherwise earn.

 

[ClubMan]

That's a ridiculous situation.

Why? Those are the rules:

1.What are State Pension (Transition) and State Pension (Contributory)?

These are social insurance payments made when you reach age 65 (for State Pension (Transition)) and 66 (for State Pension (Contributory)). They are based on your social insurance (PRSI) record.


The pensions are not means-tested, so your personal rate is not affected by other income you may have such as an occupational pension. However, the increase for a Qualified Adult is means tested.


You must be retired from insurable employment to qualify for State Pension (Transition). You can apply for State Pension (Contributory) at age 66 and continue working.

State Pension (Transition) is only paid for one year from age 65. When you are aged 66 you automatically transfer to State Pension (Contributory). The rate of your pension is not affected by this changeover.

2. How do I qualify?

You will qualify for State Pension (Transition) if you:

• are aged 65,
• are retired from insurable employment*, and
• satisfy certain social insurance contribution conditions.

* You do not need to give up employment completely.
You can be employed part-time and earn less than €38 per week paying PRSI at Class J or earn less than €3,174 per year if you are self-employed.
The retirement condition no longer applies on reaching age 66.


You will qualify for State Pension (Contributory) if you:

• are aged 66 or over, and
• satisfy certain social insurance contribution conditions.

You can continue to work full-time after age 66 and collect your State Pension (Contributory).


If you are getting the maximum Invalidity Pension, or if you are in receipt of State Pension (Transition) you will automatically transfer to State Pension (Contributory) when you are aged 66. The amount of pension you get will not change.