Is PRSI payable on pensions?

E

elacsaplau

Registered User
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When someone retires and is in receipt of a pension, is the pension payment subject to PRSI?

Also, if this person has a small ARF income in addition to the pension, say €100 per week from the ARF, are the pension and ARF income combined, for the purpose of determining if income is above the PRSI threshold of €352?

I hope this is clear and thanks for any guidance.
 
When someone retires and is in receipt of a pension, is the pension payment subject to PRSI?
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Generally no, as PRSI is not payable by those over the age of 66.

Also, if this person has a small ARF income in addition to the pension, say €100 per week from the ARF, are the pension and ARF income combined, for the purpose of determining if income is above the PRSI threshold of €352?
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Assuming the person is under the age of 66, PRSI is assessed on all reckonable earnings so, yes, the pension and ARF income is combined. Pension and ARF income would be liable to PRSI Class S, currently 4%.

This page on gov.ie has more info:- https://www.gov.ie/en/publication/80e5ab-prsi-pay-related-social-insurance/
 
Thanks Paul,

I should have been more precise in my question.

I know that over 66, no PRSI is payable. What I was trying to figure out is the position pre 66. My understanding is that annuities, at any stage, are not subject to PRSI and I'm wondering, whether or not, occupational pensions are similarly exempt.
 
Thanks very much, Conan.

If we take it that occupational pensions are not reckonable earnings for PRSI purposes, does this mean that if someone had an additional €100 per week from an ARF, such earnings would not be subject to PRSI?
 
elacsaplau said:
Thanks very much, Conan.

If we take it that occupational pensions are not reckonable earnings for PRSI purposes, does this mean that if someone had an additional €100 per week from an ARF, such earnings would not be subject to PRSI?
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I am charged PRSI (Class S) on withdrawals from my ARF. I'm under 66.
 
Thanks Shirazman,

Is this because your ARF income is greater than €352 p.w or because your ARF plus occupational pension is greater than €352 p.w.?
 
elacsaplau said:
Thanks Shirazman,

Is this because your ARF income is greater than €352 p.w or because your ARF plus occupational pension is greater than €352 p.w.?
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Neither.

My understanding is that Class S PRSI is payable on all withdrawals from Approved Retirement Funds (ARFs). The €352 threshold applies only to Class A.
 
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Big thanks Shirazman,

I'm beginning to get my head around this!

Hopefully, a final question.

If the ARF withdrawals are less than €5,000 p.a., and given that Class S contributions are only ordinarily obligated where income is greater than €5,000 p.a., does this mean that those whose ARF income is less than €5k (and whose other income is PRSI exempt), are therefor not liable for PRSI?
 
No!

As I wrote above, Class S PRSI is payable on all withdrawals from Approved Retirement Funds until you turn 66. No sub-€5,000 exemption!
 
Thanks! But.....I think I found the answer I was looking for on gov.ie!!

Looks to me like its PRSI Class K9! (where the first €100 per week is exempt as per the example used in this thread).

(I got there from a PQ from M McGrath to R Doherty).
 
I suspect you'll struggle to persuade the AVC manager that you should be considered as a Class K PRSI contributor!
But you can check it out with Scope and see what they say.
 
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All distributions from an ARF are subject to S class PRSI to persons under age 66. The S class PRSI is reconable for state contributory pension. Consider yourself lucky that your ARF is not subject to K class PRSI as the rate is the same as S class at 4% but there are no benefits.
 
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Just got on to SCOPE.

They confirmed that the €5,000 exemption does apply to ARFs, i.e. it is not correct to say that all payments from ARFs are liable for PRSI
 
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