In order to qualify for an old age (contributory) pension a person must have paid at least 260 contributions at the appropriate rate, must have entered insurance ten years before he-she reached pension age and must have a yearly average of at least ten contributions paid or credited on their social insurance record from 1953 – when the unified system of social insurance came into effect – or the date of entry into insurance if later.
A yearly average of 48 contributions is required for a full rate pension with reduced pensions payable for those with yearly averages of between ten and 47 contributions. In the case of retirement pension a yearly average of 24 contributions is required for a minimum pension.
Provision is also made for the payment of pro rata pensions in cases where people have a mix of contributions from different classes on their record or insurance from other EU countries or countries with which Ireland has a bilateral agreement.
With two exceptions all contributions paid or credited, at the appropriate rate, on a person's record are assessed when their entitlement to a pension is being examined. Only contributions made under the unified social insurance scheme, introduced in 1953, can be used to satisfy the average contribution test and only contributions made up to the end of the last complete tax year before a person reaches pension age may be counted when eligibility for a pension is being considered.
In line with the Government's commitment to ensuring the widest possible coverage for old age contributory pensions, a special flat-rate old age (contributory) pension, payable at 50% of the maximum personal rate, was introduced from May 2000 for people with pre-53 social insurance contributions who, due to the yearly average rule, failed to qualify for a pension.
This is achieved by affording additional recognition to social insurance contributions paid prior to 1953. To qualify, a person must have paid at least 260 contributions which may comprise all pre-1953 contributions or a combination of pre and post 1953 insurance. Further developments in relation to qualifying conditions for pensions will be considered in the context of the phase 2 review of the qualifying conditions for the old age contributory and retirement pensions. The first phase report was published in 2000 and the second phase report is at an advanced stage of preparation and I expect to publish it in the next few months.