Self-employed minimum PRSI and the contributory pension

[shweeney]

2 questions:

1 - if you're self-employed and paying class S at the minimum level (i.e. €500 per annum if you earn over 5K, or voluntarily below 5K) how is that treated for the purposes of the contributory pension entitlement calculation.
Is it considered the equivalent of 52 weeks?

2 - for PAYE, if you're below the PRSI threshold, but your employer is paying PRSI, do these weeks count towards the contributory pension?

 

[Black Sheep]

1. Yes
2. Yes

 

[AAAContributor]

My understanding is:

1. The social insurance record statement should indicate '52 S' under the 'Paid Contributions' column in the situation you describe and if so it is a 'Reckonable Paid Contribution for Pension'.

Bear in mind that PRSI for Self-Employed is under the microscope at the moment.

Benefits have been extended to self-employed persons over the years and the government's Tax Strategy Group is proposing that the PRSI rate be increased from 4% to 11.05% over successive budgets.

2. The employee is still credited with a PRSI contribution for social welfare benefit purposes.

 

[Sadim]

My understanding is:

1. The social insurance record statement should indicate '52 S' under the 'Paid Contributions' column in the situation you describe and if so it is a 'Reckonable Paid Contribution for Pension'.

Bear in mind that PRSI for Self-Employed is under the microscope at the moment.

Benefits have been extended to self-employed persons over the years and the government's Tax Strategy Group is proposing that the PRSI rate be increased from 4% to 11.05% over successive budgets.

2. The employee is still credited with a PRSI contribution for social welfare benefit purposes.

I suppose it makes sense even tough as a self-employed, it will hurt a bit! €500 per year was not actuarially valid or sustainable

 

[Sarenco]

I suppose it makes sense even tough as a self-employed, it will hurt a bit! €500 per year was not actuarially valid or sustainable

The TSG is not recommending any change to the minimum annual charge of €500 for self-employed workers with incomes of €5,000 or more.

 

[shweeney]

the €500 is a bit of a gotcha for anyone on a low income, working part time or doing small amount of of self-employed work as a second job. Earn €4999 and you have no PRSI liability, earn another euro and it's €500.

 

[NoRegretsCoyote]

the €500 is a bit of a gotcha for anyone on a low income, working part time or doing small amount of of self-employed work as a second job. Earn €4999 and you have no PRSI liability, earn another euro and it's €500.

A state pension of €13k for €500 a year is pretty amazing value if that's your only income though.

 

[shweeney]

A state pension of €13k for €500 a year is pretty amazing value if that's your only income though.

true if that's your only income,

Someone earning say 10K p.a. part time (PAYE), so they're getting their 52 stamps anyway; if they then do any self-employed work they're immediately on the hook for €500 class S, or am I misinterpreting the rules there?