Seán Sherlock
Question:375. Deputy Sean Sherlock asked the Minister for Social Protection if a query in relation to entitlement to the State pension will be expedited (details supplied). [46574/23]
View answerTuesday, 24 October 2023
Questions (375)
Written answers
The person concerned will reach 66 years of age in 2029.
Under current eligibility conditions, an individual must have 520 full-rate paid contributions in order to qualify for standard State pension (contributory). 520 full-rate contributions equate to 10 years of full-rate insurable employment.
On assessing entitlement to pension factors such as an individual’s social insurance record, their attachment to the workforce, and their countries of employment affect the rate of pension. It is advisable that all contributors maintain their social insurance record as fully as possible over their working life with paid contributions or, if this is not possible, with PRSI credits. Alternatively, a person who ceases to be covered by compulsory PRSI may opt to become a voluntary contributor provided certain conditions are satisfied.
PRSI Credits are designed to protect the social insurance entitlement record of insured workers who are not in a position to make PRSI contributions. In order to qualify for credits, a person must first have entered insurable employment and have paid at least one PRSI contribution at Class A, B, C, D, E, H or P.
In general, credits can only be awarded where an individual has had a recent attachment to the workforce, i.e., within the last two years. Self-employed class S contributions are not reckonable toward the award of credits.
Voluntary contributions are designed to facilitate employees or self-employed persons, who are no longer subject to compulsory PRSI, to pay contributions directly to the Department on a voluntary basis, in order to protect future entitlement to State pension (contributory) and Widow(er)’s or Surviving Civil Partner’s (contributory) pension.
In order to be admitted as a voluntary contributor, a person must apply within 60 months (5 years) after the end of the contribution year in which they last paid compulsory insurance or in which they were last awarded a credited contribution, prior to the year for which they wish to pay voluntary contributions.
As the person concerned has a full record of paid contributions in the last 5 years, 2018 to 2022, the option of paying voluntary contributions does not arise. However, if their circumstances change prior to claiming a pension, they may wish to contact my Department to discuss the option of making voluntary contributions. The contact details are Department of Social Protection, McCarter's Road, Buncrana, Donegal, Co. Donegal, F93 CH79, Tel: (01) 471 5898 or 0818 690690.
The person concerned was issued with a copy of their contribution record on 27 September 2023 along with a detailed explanatory to assist in understanding the record, and information on how to calculate entitlement to State pension (contributory). Information was also included on pension changes to be introduced from January 2024.
As part of those changes, I am introducing a flexible pension system in Ireland. Under this new system, people will still be able to retire at 66 and draw-down their pension in exactly the same way as they can today. In addition, there will be new flexibility so that people can choose to defer their pension, work longer and receive a higher pension payment.
The person concerned can decide for themselves what best suits their needs and circumstances. For example, if they reach age 66 and do not have sufficient contributions to qualify for a full pension, they will now have the option to work for longer to build up additional entitlements. If they have less than 10 years PRSI reckonable paid contributions, they can use this period to establish entitlement. It will also be open to them to continue working between age 66 and 70 and receive an actuarially based increase in their weekly payment rate.
Under the current State Pension (contributory) system significant recognition is also given to those whose work history includes an extended period of time outside the paid workforce, often to raise families or to provide another full-time caring role. PRSI Credits, Home-making Disregards and HomeCaring Periods recognise caring periods of up to 20 years outside of paid employment in the calculation of a payment rate.
As part of the series of landmark reforms to the State Pension system, I have also introduced an enhanced State Pension provision from January 2024 for people who have been caring for incapacitated dependents for over 20 years. If the person concerned has been caring for incapacitated dependents for over 20 years (1040 weeks), it is open to them to apply for the Long-Term Carer's Contributions (LTCC). The periods of care-giving do not need to be consecutive. If the criteria is met, the equivalent of paid contributions will be attributed to cover gaps in their contribution record.
Further information in relation to State pension (contributory) is available on the Government website at gov.ie/pension.
I hope this clarifies the matter for the Deputy.