Should we pay off cheap tracker on a rental property?

[Bronte]

I was hoping that it would produce a bit of a nest-egg for me in the future as I was a homemaker for years & missed out on pension/savings for my "golden years". .

I missed this bit of the original post, before you pay off the mortgage, can you see from social welfare in Sligo/Donegal if you can contribute now to your missing PRSI payments. You should check up what entitlements you have and whether a lump sum would be allowed to increase these entitlements. And I believe if you had children, some of your PRSI contributions are nowadaws counted as being earned.

 

[Bronte]

If you declare the rental income (i.e. in your name) you must pay class S prsi on that and that towards the contributory OAP

I believe there is an issue with one person declaring the rental income as 100% theirs.

I did not realise that rental income that one pays PRSI on, may entitle you to a social welfare payment in the future, are you sure of that?

 

[cremeegg]

I believe there is an issue with one person declaring the rental income as 100% theirs.

I was not aware of this, do you have any further info.

I did not realise that rental income that one pays PRSI on, may entitle you to a social welfare payment in the future, are you sure of that?

I think that I am sure if that makes sense. I have done a fair amount of research into this and my understanding is that class S PRSI is payable on rental income, and hat this counts towards the contributory pension. However if anyone knows something different I would be very interested as this is a significant part of our financial planning.

 

[Bronte]

I know we debated before on the options of one person declaring the rent. But it doesn't make sense, as the property is jointly owned. And generally anything that's designed to avoid/evade has to be tackled very seriously.

No idea about the PRSI, just would like proof that paying that Class S would give an entitlement to pension. Maybe Mr.Bronte can retire earlier, or we don't have to worry about redundancy if that were the case as he would then be able at age 65/68 whatever get the full pension. Sounds too good to be true.

 

[Harry31]

The rental income/tax etc. is declared in both our names & we go to an accountant once a year to get the paperwork sorted - other half does it online. I was at home for about 12 years in the 80's/early 90's & have been an employed PAYE person since. I enquired years ago about signing for credits (was doing a course with other stay at home mums) & we were refused the right to "backdate" credits - even though none of us had been informed that we had the right to sign for credits when our "stamps" money ended. As I have been working all these years & have there is a company pension in place, that I would be short contributions for the state pension. When we go to Dublin this week we're only going to pay off £10,000, just to see if they offer us any incentive to pay off more. I was concerned that they might take us of the tracker type contract we have, as we are the ones changing the situation, but they have assured us that will not be the case. Interesting points raised by everyone - thanks.

 

[Bronte]

.- even though none of us had been informed that we had the right to sign for credits when our "stamps" money ended. .

Yes a lot of people don't realise that. Even if now working one should always sign on for credits. Harry I would enquire now about your current entitlements and what can be done to get back missed years. No harm sending a letter to the pensions office, they are very helpful on the phone too. But only get concrete advice in writing.

 

[cremeegg]

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