State Pension Entitlement

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Daddy Ireland

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Are a married couple who have been PAYE workers majority of their working lives entitled to a full state pension at top rate currently of €248.30 each on reaching pension age.
 
Yes if they satisfy the paid contributions and started paying before the age of 56. You must have 10 years contributions.
 
Under current rules (due to change in 2020 or 2021) you must have an average paid/credited contribution rate of more than 48 per annum from when you first entered the workforce up to the Dec before your 66th birthday. If your yearly average is less than 48 pa then you get a reduced rate. So for example if your average is between 40 and 48 then you get a 98% Pension, if between 30 and 39 then you get a 90% Pension. You need a minimum of 520 paid contributions (10 years) to get the minimum pension of 40%.
 
there is also something about If they worked in other countries for a period of time (e.g. UK) and have a pension entitlement there i think the DEASP will assist them in applying for those pensions and then reduce the Irish pension by that amount so they still only receive the top rate.
 
Thanks for replies. Just one other related query. Spouse 1 is 65 and retires. Spouse 2 is 58 and retires on ill health grounds having worked for 30 + years. Referring to Conan post 3 above will this effect Spouse 2's entitlement to a full state pension.
 
Daddy Ireland said:
Thanks for replies. Just one other related query. Spouse 1 is 65 and retires. Spouse 2 is 58 and retires on ill health grounds having worked for 30 + years. Referring to Conan post 3 above will this effect Spouse 2's entitlement to a full state pension.
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If Spouse 2 has 9 or 10 years to go to receiving the State Pension (age 68 after 2028) then she should sign on for credits each year until retirement age. The formula for calculating the State Pension is due to change in 2020 or 2021 and I expect we will see a formula of 1/40th of the State Pension for each year of contribution/ credit. Exact details are awaited from the Dept.
 
You can sign on in your local Intreo (Social Welfare) office. Once she retires she should call into the local office and explain what she wants to do. If she is getting Disability or Illness Beneit from SW then credits will automatically be added to her record.
 
Daddy Ireland said:
Thanks my spouse is receiving Invalidity Pension so credits are accumulating.
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Is it Invalidity Pension or Illness Benefit she is receiving? I think if she is receiving Invalidity Pension then she will automatically qualify for full state pension at 66.
 
Conan said:
The formula for calculating the State Pension is due to change in 2020 or 2021 and I expect we will see a formula of 1/40th of the State Pension for each year of contribution/ credit. Exact details are awaited from the Dept.
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Very interesting information.

Thats a substantial reduction of credits required on the current regime, where you have to have an annual average of 48 credits per year, from when one first started paying PRSI,(or receiving credited contributions) up to age 66.

In short, it would mean a whole lot more people would qualify for the full state contributory pension amount, but that would also mean, a considerable extra cost to the exchequer.

Is this really the current expectations as to what will happen ? Moving effectively from 1/48 up to 1/40 ? as it doesen’t sound very realistic, unless this is coupled with an increase in the age that the payment is effective from. Maybe 68 to 70.
 
Your interpretation is not quite correct.
Under the current system you need an average of 48 weekly contributions per annum over your working life. Yes for some that might mean over 45 year period or more. But equally if you only entered the workforce at say age 40 or 50 , then you still only need a yearly average of 48 (circa 1000 contributions). And if you are below 48 the reduction in pension is very small e.g. 98% or 90%.

The proposed new rules are more equitable in that to get the max, you need a 40 year record (2080 contributions).
So on balance I suspect that the overall cost to the State (us) will be lower.
 
Conan said:
The proposed new rules are more equitable in that to get the max, you need a 40 year record (2080 contributions).
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I'm not sure that has been finalised yet - aren't we waiting for an announcement at the end of the month on the design of the new rules?
 
Yes but prior to finalising the design of the total contribution approach, the Government still has a number of decisions to make.

One paper suggested that 30 years of contributions would be required to secure a maximum State pension, whereas another (later) paper suggested that 40 years would be required.

Unless I missed it, I believe we are still waiting for a final Government decision on this point.
 
Similar to what Conan was saying methinks it will just be based on 40 years contributions/credits. So 2080 contributions/credits would be required for a 100% pension. If you've fewer than that then just work out the percentage. Credits(inc. Home Carer credits) capped at 1040.
 
As you say, maybe it's not quite finalised . . I like the proposed new system, perhaps those in LH will be persuaded if there is an extended transition period whereby people can opt for their pension to be calculated under the old system.
 
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