State Contributory Pension: Proposed Changes to calculation and years of contribution

T

Tralee

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I am currently 65 and will be 66 when the government’s proposed changes to how the state pension is calculated i.e. based on total contributions is introduced. Also, in 2020 the number of contributory years jumps to 40 from 30.

I am not sure if many pensioners approaching 66 realise how the changes will impact on their yearly pension income. I had pre-calculated my pension a few years ago and anticipated retiring at 66, but now I will most likely need to keep working as I have not had enough time to prepare for the changes as my pension income falls quite significantly.

I have heard nothing on the news or in the papers yet about the government decision about the changes and wonder if anyone has any insight on this matter.
 
The details of the proposed changes have not yet been clarified. So not yet clear if changes will be introduced in 2020 or if there will be a transition period.
I am expecting a Govt statement in the coming weeks (suspect Brexit is priority at present).
 
This taken from the welfare website-

The State pension will be reformed and will remain as the fundamental bedrock of the pension system in Ireland. To do this, the Government will introduce from 2020 a 'Total Contributions Approach' (TCA) for the State Pension (Contributory). The TCA is advanced as a more logical and transparent system, where the individual's lifetime contribution will more closely match the benefit received.
Under TCA, a person's contributory pension will be proportionate to the contributions they make, with fair regard for periods of child rearing, full time caring, and periods in receipt of social protection payments. With effect from March 2018 (with arrears paid at the start of 2019), people who reached pension age from 1 September 2012 will be offered the option of transferring to a TCA model, and following a consultation in 2018, a TCA model will be proposed for all new pensioners from 2020.
As with the model being offered on a transitional basis to post-2012 pensioners, the model from 2020 is expected to prioritise those who up to now were impacted upon by anomalies in the 'Yearly Average' system in place since 1961, and whose home-caring prior to 1994 has not been recognised until now. For those with very few contributions who are not favoured by the new system, there will remain a non-contributory pension.
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Based on The excerpt from the Social Welfare we site not sure if a transition period is part of the plan. One would hope so, but thus far there has been no mention of it.
 
Tralee said:
I am currently 65 and will be 66 when the government’s proposed changes to how the state pension is calculated i.e. based on total contributions is introduced. Also, in 2020 the number of contributory years jumps to 40 from 30.
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We don't really know if this figure has been set in stone yet. We need to wait until the finer details emerge and with Brexit it may very well be delayed.
 
Ok interesting topic here, in my case I have been in fulltime employment for 23 years (I'm now aged 45) and ideally hope to retire aged 60. I have a good private pension and hope to make it to age 68 to draw the state pension. Do the changes mean I should work til I'm 63 to qualify for the 40 years contributory level? Also are you entitled to a full state pension even if you have a private one assuming I complete the 40 years contributory? (Sorry for hijacking the thread Tralee)
 
Saavy99 said:
We don't really know if this figure has been set in stone yet. We need to wait until the finer details emerge and with Brexit it may very well be delayed.
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I suspect the are snookered on the none contributory pension, it is almost as much as the contributory pension cant see them going to 40 years for a contributory pension ,someone who never worked a day in there life would finish up on more than a person who worked for 35 years and seen around 18% of payroll taken most of there working life,
 
Don
We have to await the details as to the proposed 2020 changes. However it appears that under the new system you will get 1/40th of the State Pension for each year of contribution. I suspect that contributions above 40 years will not get any extra benefit. You may contribute for more than 40 years up to age 68. It is unlikely that you can stop contributing at age 63 (unless you have already retired and are signing for credits only).
The entitlement to a State Pension is separate from any occupational pension.
 
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