The Minister for Social Protection, Heather Humphreys has announced the establishment of a new Commission on Pensions which will examine the sustainability and eligibility of State Pension arrangements. The Commission will outline options in relation to pension qualifying age, contribution rates, the total contribution approach and eligibility requirements. According to Josephine Feehily, Chair of the Commission “for many, the State Pension represents all or most of their weekly income. It is the main pillar of the Irish pension system. I am conscious that talks of increasing the State Pension age can be a cause of great concern.”
The Government has agreed to defer the planned increase of the State Pension age which was due to be increased to 67 years of age from 2021 and to 68 from 2028. These changes have been deferred pending the report of the Commission on Pensions which is due to be released in June 2021
The State Pension, contributory or non contributory must be applied for at least three months before reaching the pensionable age of currently 66 years of age. It’s possible that if you do not qualify for the State Pension (contributory) based on your Irish Social Insurance contributions, any contributions you may have paid abroad may help you to qualify for a reduced rate of pension. If this is the case, you must apply six months before the pensionable age in order for other countries to be contacted.
There are two types of State Pension – Contributory and Non-Contributory. The contributory State Pension is based on your insurance (PRSI) record. You can continue to work full-time after the age of 66 and collect your State Pension.
The non-contributory State Pension is a means tested payment for people aged 66 or over who do not qualify for the contributory State Pension, or who qualify for a reduced rate contributory pension based on their social insurance record. However, you must have a legal right of residency and be living in Ireland to qualify.
You can apply for both State Pension (contributory) and State Pension (non contributory). If you are not eligible for the maximum contributory rate, you will receive the most beneficial pension amount. You cannot claim both pensions at the same time.
With some exceptions, employees, self-employed and apprenticeships (over 16 years) are insured through the payments of PRSI contributions. If you are self-employed, only full rate of contributions are considered in order to qualify.
To be eligible for a State Pension (contributory) at the age of 66 you must satisfy the following criteria:
From March, 2018, a person who reaches the State Pension age after the first of September, 2012 may qualify under the Total Contributions Approach. Under this method, 2,080 weekly contributions (of which 1,040 may be a home caring period, or 520 may be credited contributions) may qualify a person for the maximum rate of pension subject to satisfying other criteria. It is possible to qualify for a reduced rate of pension for those with fewer contributions based on a pro-rata basis. For example a person with 1,040 contributions may lead to a 50% pension rate entitlement.
If you don’t qualify for the contributory pension, you may be eligible for the Non-Contributory State Pension. This is a means tested payment for anyone aged 66 years or over who do not qualify for the Contributory State Pension. In order to qualify you must satisfy all of the following conditions:
The means test is a way of checking if you have adequate means by which you can support yourself in order to see what amount you may qualify for. Means refers to any income received by you or your partner/spouse or assets that may provide you with an income. Your home is excluded from calculation of income in relation to the means test. Providing you satisfy the above conditions, you will qualify for the Non-Contributory State Pension if your weekly means are €262.50 per week or below this amount.
The main items are the following:
If you are married/civil partner or cohabiting with another person, your means will be taken as half the joint means of both you and your spouse/partner.