is there a difference between being contractually obliged to retire at 65 and voluntarily retiring at 65?
I decide to retire and draw an income from an ARF, will I be able to claim the new social welfare payment?
This is so stupid. Why don't they just put the pension age back to 65.
Afterall, a well pensioned employee on €200,000pa is hardly reliant on the SCP?
Surely not required/irelavent if they've paid PRSI all their life?
True but it is a social welfare benefit is it not? Like, even taking my 60% cut-off above a €148.30pw (€7,712pa) pension would require a fund of something like €220,000 at retirement to pay for it (assuming an annuity rate of 3.5%). Would the cumulative value of their employee PRSI contributions have exceeded €220,000 over a 40 year working life.
Take an average salary of €50,000 increasing by 2%pa and a PRSI rate of 4% => €120,000 contributions in nominal terms over 40yrs. If this was in a dedicated fund earning 3%pa, those contributions should total €220,000 over 40yrs ergo, the benefit is fully funded.... purely accidental my choise of 60% universal benefit and finding it was fully funded based on a salary of initial €50,000pa and a 2% annual increase!
The point I am making though is that the current SCP rate of €248.30pw is not fully funded so, the argument you've paid PRSI all your life is only half of true. The full truth is you didn't pay enough PRSI relative to the benefits. And, its even worse when you consider that PRSI covers more benefits than just the SCP
This is so stupid. Why don't they just put the pension age back to 65.
Shouldn’t your calculations include employer’s PRSI ?
Shouldn’t your calculations include employer’s PRSI ?
Pension age is actually pretty simple in Ireland compared to a lot of the EU where it can depend on stuff like whether you worked down a mine.
Successive governments missed a trick by proposing these big one-year jumps that meant if you were born on 31 December 1954 you got a pension the next day but if you were born on 1 January 1955 you had to wait another 365 days. This isn't fair.
The UK approach, of six-week increases in eligibility age every year, would have been much more equitable.
Correct. Everyone forgets this.
The actuarial review of the social insurance fund shows that on an average salary the state pension more or less funds itself in notional terms (nothing is invested of course). If you have a long career on low wages the state pension is really good value. If you are a doctor or something you are probably funding yourself three times over.
Pension age is actually pretty simple in Ireland compared to a lot of the EU where it can depend on stuff like whether you worked down a mine.
Successive governments missed a trick by proposing these big one-year jumps that meant if you were born on 31 December 1954 you got a pension the next day but if you were born on 1 January 1955 you had to wait another 365 days. This isn't fair.
The UK approach, of six-week increases in eligibility age every year, would have been much more equitable.
Correct. Everyone forgets this.
The actuarial review of the social insurance fund shows that on an average salary the state pension more or less funds itself in notional terms (nothing is invested of course). If you have a long career on low wages the state pension is really good value. If you are a doctor or something you are probably funding yourself three times over.
In truth I do not know. I would have thought employers PRSI covers a lot more things like sick pay, statutory redundancy, disability etc, even non contributory state pensions as they are all drawn from the social insurance fund? The employer contributions are not part of any individual's PRSI record, they just go into a general fund, the only element that is personal is the employee contribution. It is all a bit opaque, who is funding what and from what I've seen there have been no actuarial calculations done on it.
Yes, the UK state pension rose to 66 in 2020 but not in simple one year blocks, it was a more scientific way of doing it and definitely fairer than the anomaly you have highlighted
Non-contributory pensions are not paid from the Social Insurance Fund. They are paid from the annual budget allocation of moneys to the Department (called the Vote). PRSI, whether paid by employee or employer, is used to pay all of the contribution-based SW payments (jobseekers, illness, invalidity, widow/er, state pension).
The Social Insurance Fund is subject to regular actuarial reviews.
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Link to the last review in 2015.
My sister in the UK, born the year before me, got her pension at age 60. I had to wait till 63 and a half for my UK pension. It didn't feel fair.
Non-contributory pensions are not paid from the Social Insurance Fund. They are paid from the annual budget allocation of moneys to the Department (called the Vote). PRSI, whether paid by employee or employer, is used to pay all of the contribution-based SW payments (jobseekers, illness, invalidity, widow/er, state pension).
I have already"retired" at age 62 having worked in the PAYE sector for 42 years and am currently drawing from my ARF. When I reach the age of 65 will I be entitled to this new Social Welfare Payment? Thanks in advance.
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