State Pension (contributory) with Homecarers and the the Total Contributions Approach

Hello. First time poster here so apologies if this not in the right place. I have a what I thought was a rather complicated question but having skimmed the forum I hope it proves rather simple for the experts on here. I have asked on various official channels but been given the runaround. I am posting this on behalf of my wife who is a recently retired (Sept 2024) primary school teacher.

The way her SPC will be calculated is either using a total contributions approach (Pure TCA) or a combined Yearly Average Method + TCA on a sliding scale. My wife will reach 66 in 2028, so the ratio for the combined approach is 60% Yearly Average + 40% TCA. She has a good Yearly Average, way above the 48 threshold, so all my calculations suggest the combined approach will give her a better outcome. She only has ~1200 PRSI A contributions, so we have been trying to increase this to increase the amount of the 40% TCA component. She recently applied for Homecarers Periods and received 431 potential contributions.

This is where it gets complicated. It says everywhere that Homecarers Periods can only be applied to the TCA method which makes sense. Does this mean that she can only benefit from the Homecarers increase if her State Pension is calculated using the Pure 100% TCA approach? Or, can the Homecarers Period also be used in the combined approach for the TCA component of the calculation, in her case the 40% component? She can only really benefit from the Homecarers if they can be used in the combined approach.

If she can't benefit from the Homecarers then we will consider making voluntary PRSI A contribution purchases.

I suspect there will quite a few in the same boat as my wife. They could do with clarifying the online documentation to make it clearer. If I do hear back from official channels I will post back.

jeremyr62 said:

It says everywhere that Homecarers Periods can only be applied to the TCA method which makes sense.

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That is correct. You need to look into her applying for Homemaker credits, which would apply to the YAM.

Thanks but her Yearly Average is fine already. Homemakers won't benefit her at all.

The two calculations are made separately as if only one method applied.

So a TCA calculation is done and the total pension entitlement is determined. This calculation uses all credited contributions up to a maximum of 1040. So all her home carers credits will apply.

Then a seperate YA calculation is made. If this calculation is higher than the TCA calculation, then the two calculations are combined at the percentages relevant for the claim year.

For the YA calculation she will get maximum pension determined as she has average 48. The Homemakers scheme disregards will also be included but this won't alter the final result as having average of more than 48 doesn't change the determined pension amount.

Both the Home carers scheme (TCA calculation) and the Home makers scheme (YA calculation) benefits are used.

It's not just one or the other.

If she ceases employment before age 66, she should claim Jobseekers benefit and when the payments end she should continue signing on for Jobseekers credits.

This will maximise her Prsi contributions for the TCA calculation.

S class said:

Then a seperate YA calculation is made. If this calculation is higher than the TCA calculation, then the two calculations are combined at the percentages relevant for the claim year.

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That's great. That is the clarification I was seeking. She isn't eligible for Homemakers as she didn't pay a PRSI contribution until after she completed the caring period of our children.

She did claim Jobseekers Benefit and received it for 9 months immediately after she retired from Teaching. I will encourage her to apply for the Jobseekers Allowance credits.

Thank you very much for the answer.

@jeremyr62

Is it less than 2 years since her Jobseekers benefit payment period ended ?

She can only qualify for more Jobseekers credits if it is less than 2 years since her last credited contribution.

If it's more than 2 years she would need 26 weeks of employment to get back into the Prsi system.

S class said:

Is it less than 2 years since her Jobseekers benefit payment period ended ?

She can only qualify for more Jobseekers credits if it is less than 2 years since her last credited contribution.

If it's more than 2 years she would need 26 weeks of employment to get back into the Prsi system.

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Hello,
Yes, her Jobseekers Benefit ended in June this year. She has filled out the form and will take it to Intreo. Thanks again.

jeremyr62 said:

her Jobseekers Benefit ended in June this year.

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Okay.

Act quickly. If she gets 39 or more Jobseekers credits this year, she has satisfied one of the rules for qualification for Benefit payment 65.

She already meets the other rule of needing 13 weeks of employment in any calendar year from the year of her 61th birthday onwards.

She can qualify for this Benefit. It is paid at the same rate as Jobseekers Benefit and runs from her 65th to 66th birthdays.

There is more information on this in this thread.

S class said:

Act quickly. If she gets 39 or more Jobseekers credits this year, she has satisfied one of the rules for qualification for Benefit payment 65.

She already meets the other rule of needing 13 weeks of employment in any calendar year from the year of her 61th birthday onwards.

She can qualify for this Benefit. It is paid at the same rate as Jobseekers Benefit and runs from her 65th to 66th

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Ok, we had not even heard of that. She might just miss out on the 39 weeks. She is getting an OSP at the moment from the Dept of Education which she would have to forfeit if she received the benefit at 65 so she is OK.

May I ask how long she might expect to receive Jobseekers credits for if she applies at the end of August and the Jobseekers Benefit ended at the beginning of June this year? I think I read something about 2 years?

She can get Jobseekers credits up to her 66th birthday.
She just needs to sign on once per year.
DSP will notify her when her sign on date is.
It's usually in September.

She could reach 39 contributions this year if she signs on immediately. She already has credits during her Jobseekers benefit payment period. So she has approximately 5 months gained. Another 4 months gets her there, so September to December does the job. A few weeks in August will definitely ensure she hits the 39 target.

She would only forfeit the suplimentary part of her public sector pension. Because of her short service time, BP65 will most likely be greater than the forfeited pension amount.

S class said:

She could reach 39 contributions this year if she signs on immediately. She already has credits during her Jobseekers benefit payment period. So she has approximately 5 months gained. Another 4 months gets her there, so September to December does the job. A few weeks in August will definitely ensure she hits the 39 target.

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Thanks again. Really useful information. Regarding the 39 contributions. It will be tight. I am writing this on the ferry to Holyhead. We are back on the 23 August. She might just make it.

Great forum.

@jeremyr62

She should phone the Intreo center on Monday. They might set the credits to start from the date of contact. They usually set a first signing date a few weeks later. If it is set for before you arrive home, make an excuse to delay it.

Enjoy the holiday !

I will twist her arm to call.
Thanks again!