PRSI - Entry into Employment Question

A

atgate

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Hi

When looking at my other half's social insurance record there are 16 class "J" credits back in 1987/88 and then nothing till 1997 where there are "38 A, 52 S" credits.

I can tell that Class J aren't reckonable for pension but are they for entry into employment for yearly average? He has no idea what they actually were. There's also a mix of A and S credits so it's really hard to get a sense of whether he'll be eligible for any contributory pension at all (he has some years between 88 and 97 of unemployment. And then a decade or so abroad.

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Any advice would be much appreciated. I did ring Welfare, but ended up more confused.

Thanks :)
 
NoRegretsCoyote said:
What country? He may be able to use these for eligibility in Ireland.



Was he in the FCA? Class J is payable on FCA training allowances.
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Thanks for replying!

The country was Northern Ireland (he's chasing them to pay missing years and continuing till he retires).

He wasn't in the FCA (I had a good laugh at that if you knew him), but the training thing triggered a memory that he did some form of "start your own business" or "self-employment as a career" training, so it may have been that.
 
NoRegretsCoyote said:
Good!

Make sure to do it before April as the window closes to pay more than five years in arrears then.
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Thanks, he's been at that for months - should have a final answer about class ii or iii by the end of the month.

Don't suppose you have any idea if training allowances count for "entry into employment"?
 
atgate said:
I can tell that Class J aren't reckonable for pension but are they for entry into employment for yearly average?
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Doesn't the PRSI contribution statement say at the top what the date of entry into the system is?

Edit: I just requested a digital/PDF copy of my contribution statement via myWelfare and it does have the date of entry at the top. In fact, I also have some contributions that are not reckonable for pension cover (class M - part time job at age 16) but do count for entry into the system.
 
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The guidance says that the first time you pay PRSI is "entry into employment". This doesn't seem to depend on the class of insurance paid.

This could work against him if he is relying on the annual average approach of course as his first contributions were very young and there's a big gap when he was in NI.

See link:

Full Rate Employment contributions​

The department will work out your entitlement to state contributory pension from the date your first social insurance contribution was paid (the date you first entered insurable employment).
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atgate said:
Didn't spot that, thanks. But in any case its blank on his. Guess we need to go back to Welfare.
View attachment 7105
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I've had a statement posted to me, and it's the same as that. As in, the date of entry part has been left blank. Which is a pity, as I'd hoped that it would say the date I first paid PRSI, as that would help with my average calculation.
 
Lisgoold said:
Which is a pity, as I'd hoped that it would say the date I first paid PRSI,
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As per above, I don't think there's any ambiguity. First PRSI payment at any class is used for the averaging calculations.

This is pretty unfair on someone who had a summer job at 16 and then had big gaps in their contribution record for whatever reason, but that's another story.
 
NoRegretsCoyote said:
As per above, I don't think there's any ambiguity. First PRSI payment at any class is used for the averaging calculations.

This is pretty unfair on someone who had a summer job at 16 and then had big gaps in their contribution record for whatever reason, but that's another story.
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I agree. It would favour someone like me, who started paying PRSI much later, and harsh on someone who started early, but then had a gap .

But I thought there were two methods of doing the calculation, and both were used, and whichever was the best option, is the one used?
 
Lisgoold said:
But I thought there were two methods of doing the calculation, and both were used, and whichever was the best option, is the one used?
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Exactly. But you could have the situation where the averaging approach works against you due to a few contributions when you were very young.
 
Lisgoold said:
But I thought there were two methods of doing the calculation, and both were used, and whichever was the best option, is the one used?
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TCA vs averaging.

State Pension (Contributory) pre 2025

The State Pension (Contributory), previously called the old age pension, is paid to people aged 66 and over, who have worked and paid enough social insurance contributions. This page is for people who were born before 1 January 1959 and did not defer claiming their State Pension (Contributory).
www.citizensinformation.ie www.citizensinformation.ie
The National Pensions Framework has proposed that the TCA be introduced to replace the current average rule. However, legislation is required before any changes may come into effect.
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Thanks to all. It does appear to be a little unfair. But on the upside the hunt for answers brought us to askaboutmoney a few months ago where we learnt about the UK / NI situation, so whilst he may have a reduced pension down here he may get a good chunk up North.
 
atgate said:
Thanks to all. It does appear to be a little unfair. But on the upside the hunt for answers brought us to askaboutmoney a few months ago where we learnt about the UK / NI situation, so whilst he may have a reduced pension down here he may get a good chunk up North.
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If he tops up to 35 years NI contributions via voluntary contributions he will get the full UK state pension.

This is the best investment he can ever make and make sure the make the back payments.
 
Early Riser said:
I think the unfairness is the averaging system itself. The sooner it is phased out in favour of the an exclusive TCA the better. Fairer for everyone.
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Does it really matter given that the most favourable of the two is applied in each individual's case as things stand?
 
ClubMan said:
Does it really matter given that the most favourable of the two is applied in each individual's case as things stand?
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In terms of fairness it does. Someone who first enters the insurance system at 55 can qualify for a full State Pension at 66 under the averaging system. Someone else with 30 years of contributions may only get a partial pension under either approach.

Take two guys who emigrated at 18.
One worked for a few weeks in a partime job but enough to enter the insurance system. After 17 years abroad he returns to work in Ireland and pays PRSI for another 30 years. At retirement he will qualify for a partial State Pension.
The other, who had no mickey mouse job for a few weeks as a kid, returns aged 55 after 37 years working abroad and works for 10 years in Ireland. He get a full Irish pension.
Fair?
Or maybe the second guy didn't live in Ireland at all until he arrived as an immigrant at 55. He still gets a full State Pension after 10 years work, while someone who has worked for 30 years does not. Fair?
 
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