There are two categories of contributory State pension:- State pension (transition) (SPT) payable at age 65 and State pension (contributory) (SPC) payable at age 66. The qualifying conditions for State pension (transition) require the applicant to:
have entered insurable employment before attaining the age of 55 years.
have at least 260 full-rate social insurance contributions paid since the date of entry into insurance.
Have a minimum yearly average of 24 contributions (paid or credited) since the date of entry into insurance.
have retired from work.
State pension (transition) ceases at age 66 when the claimant transfers to (SPC). The qualifying conditions for State pension (contributory) require the applicant to
have entered insurable employment before attaining the age of 56 years.
have at least 260 weeks full-rate contributions paid, from employment or self-employment, since entry into insurance.
Have a minimum yearly average of 10 contributions (paid or credited) since the date of entry into insurance.
As provided for in legislation since 1997, the minimum paid contribution requirement for SPT and SPC will increase to 520 contributions in April 2012. In relation to date of entry, the legislation provides that the date of entry into insurance is the date a person becomes an insured person and enters employment for which a social insurance contribution is payable. This contribution can be paid at the full, modified or self employed social insurance rate. It is not possible to waive legislative requirements when determining the nature and rate of pension payable. There is no provision for disregarding any early paid contributions for the purposes of increasing the rate of State Contributory pension even where contributions are of an intermittent or occasional nature. For the purposes of the averaging system in place, a date of entry into insurance is an essential element of the assessment system and is provided for in legislation.
Different eligibility criteria apply under the self employment legislation which provides that where an individual who is self employed has paid standard PRSI prior to 6th April 1988, and where s/he entered self-employed PRSI on 6th April 1988, either the initial date of entry or the later 1988 date can be used as the commencement date of the assessment for State Pension Contributory, whichever is the more favourable. However, where the date is later than 6th April 1988 the earlier date is the date which is used for assessment. Similarly, different eligibility criteria applies where the alternative contribution test is applied (ACT) to the assessment process, where a person has a minimum yearly average of 47.5 contributions from 6th April 1979 to the year that they reach 65 or 66 years of age.
I do not consider this to be an anomaly as this legislation provision has been in place since pensions were first introduced. As part of the pensions reform programme, the introduction of a ‘total contributions' approach will replace the current averaging system from 2020. This means that from 2020 a person will require 30 years' contributions and credits to qualify for maximum pension with 10 years' paid contributions required for a minimum pension. The amount of credits which can be used to claim pension will be capped at 10 years. This system will be fairer as the level of pension payment will be proportionate to a person's working career e.g. a person with 25 years contributions will receive 25/30ths of a pension.