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This information relates to modified rate Prsi employees. Typically class B or class D.
When these employees cease paying modified Prsi, new opportunities open for them to pay for, or receive free of charge reckonable Prsi contributions.
They are entitled to 'change of status' credits if they become class A contributors after they retire. Change of status credits are awarded for the full year of their retirement and for the previous full year.
1 or more class A contributions will allow for qualification for change of status credits.
The year prior to their retirement year is straightforward. They receive 52 reckonable change of status credits for that year.
Their retirement year is a bit more complicated.
They are awarded 52 reckonable credits for their retirement year. These are awarded even if there is a gap in their retirement year record.
So for example, they cease modified class employment 30 weeks into the year and take up class A employment for one week. (This can be any number of weeks after they retire, up to the end of their retirement year). Their retirement year Prsi will consist of 51 reckonable credits and 1 reckonable paid class A contribution. So a total 52 reckonable contributions.
But what if they need to maximise their number of full rate paid contributions?
They might need these to reach the 260 reckonable paid contributions to secure a mixed class pro rata COAP or the 520 reckonable paid contributions to reach the normally calculated COAP.
They can only get full rate paid contributions starting from the next Prsi week following their retirement date. So for example if they worked 30 weeks into the year of their retirement, they can only receive a maximum of 22 reckonable paid contributions for the rest of that year.
If they want to get the extra 21 available paid contributions, beyond the initial 1 class A they have already paid, they can get extra class A or class S contributions.
If they do not wish to continue in class A employment beyond their public sector retirement, they can use an ARF to provide these paid contributions.
For example, if they have retired at age 60, they have the choice of taking ARF drawdowns immediately, or they can wait until age 61 before taking ARF drawdowns.
If they are in the category of needing all extra available full rate paid contributions, they should drawdown 5k from their ARF in their retirement year.
When these employees cease paying modified Prsi, new opportunities open for them to pay for, or receive free of charge reckonable Prsi contributions.
They are entitled to 'change of status' credits if they become class A contributors after they retire. Change of status credits are awarded for the full year of their retirement and for the previous full year.
1 or more class A contributions will allow for qualification for change of status credits.
The year prior to their retirement year is straightforward. They receive 52 reckonable change of status credits for that year.
Their retirement year is a bit more complicated.
They are awarded 52 reckonable credits for their retirement year. These are awarded even if there is a gap in their retirement year record.
So for example, they cease modified class employment 30 weeks into the year and take up class A employment for one week. (This can be any number of weeks after they retire, up to the end of their retirement year). Their retirement year Prsi will consist of 51 reckonable credits and 1 reckonable paid class A contribution. So a total 52 reckonable contributions.
But what if they need to maximise their number of full rate paid contributions?
They might need these to reach the 260 reckonable paid contributions to secure a mixed class pro rata COAP or the 520 reckonable paid contributions to reach the normally calculated COAP.
They can only get full rate paid contributions starting from the next Prsi week following their retirement date. So for example if they worked 30 weeks into the year of their retirement, they can only receive a maximum of 22 reckonable paid contributions for the rest of that year.
If they want to get the extra 21 available paid contributions, beyond the initial 1 class A they have already paid, they can get extra class A or class S contributions.
If they do not wish to continue in class A employment beyond their public sector retirement, they can use an ARF to provide these paid contributions.
For example, if they have retired at age 60, they have the choice of taking ARF drawdowns immediately, or they can wait until age 61 before taking ARF drawdowns.
If they are in the category of needing all extra available full rate paid contributions, they should drawdown 5k from their ARF in their retirement year.
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