Is it worth paying PRSI for pension benefit??

Hi
Im self employed but earnings are under the threshold for paying PRSI therefore I can chose to opt out this year (2009 return) and save myself €253.

My question is should I think about paying it - I know it covers dental (which I don't use that much) and the state pension. (I'm 34)

I can't find the exact rule on the pension entitlements - do you have to have paid something every year and if you miss a year do the previous years go to waste?

I'd appreciate an urgent response as I have to post tax forms in the morning

Thanks

At the moment entitlement to State Pension is based on a minimum average of contributions, from when you first started to pay into the Prsi system. If you don't make the minimum you don't get the contributory state pension but might still get a means tested one.
But there are changes afoot, and surely will be more changes before you reach 68 or whatever will be your retirement age. If you were closer to retirement I'd advise paying it: €253 per year to get back €230 per week is a great investment.
Whichever you decide, the previous years do not go to waste.

Thanks

Do you know if I miss a year does it make a difference, or do I have to keep it going to make sure previous years dont go to waste.

Hi Gervan,
Please show me the way to pay € 253 per year, because I pay minimum hour wage rate montly the following: € 8.65*40 hours *4 week= €1384,
then minus prsi 3%, (€41.52) minus levy 2% (€27.68), tax due 20% = €276.8, but tax credit (1830/12=152.5), tax deducted 276.8-152.5=124.3
Total: Gross 1384-(27.68+124.3=151.98 PAYE) - 41.52 (PRSI ) = net € 1190.50
so, I pay mounthly € 151.98 PAYE and € 41.52 PRSI, total € 193.5
What's wrong with me please ?

Nicky

What's wrong with me please ?

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The OP is self employed, so is probably on far less than the minimum wage, like many self employed people.

Nicky, I was responding to the Original Poster, whose income was below the threshold at which he would need to pay Prsi. Voluntary Prsi in that case is €253.
Believe it or not, there are many of us self employed who are working for amounts you would probably turn your nose up at, but we soldier on somehow, hoping to qualify for the State pension. Although it seems to be getting further away, not closer.

idontknow, you won't lose the benefit of your previous years' contributions, but missing a year will lower your average.
Also, if you have no contribution for 2010, it would affect your entitlement to a benefit that looks to 2010 as the qualifying year. Maternity benefit, adoptive benefit, bereavement grant eligibility, all refer to contributions made in a particular year.

You know your situation, and whether you may be likely to require any of those benefits in 2012. If so, you might regret having made the small saving on Prsi.

By the way, dental benefit is not a Class S benefit.

Thanks Gervan, it does make sense now

Thanks for that,

My main concern was losing previous years benefit, as I'm onlyu 34 im sure missing one year won't make much of a difference (every penny counts this year!)

To others on PAYE, alot of self employed people incur an awful lot of expenses and when you add it up at the end of the year it's not worthwhile being in business but you have to keep your career going in the hope that things will pick up.

Thans again for your help, this website is fantastic