State pensions from >1 country: can they be better than an Irish-only State pension?

iptba

I have come across people in (the Rep. of) Ireland who qualify for State pensions from the UK and Ireland. I'm just curious do they (in some circumstances) get more than people who just worked in Ireland. It doesn't seem the best system if that is the case.

This is an example but I'm afraid I can't tell from it is this person getting more or not i.e. is he getting the full Irish pension and also the part-UK pension, or is his Irish pension decreased by exactly the quantity of the UK pension.

Thanks.

http://www.finfacts.ie/fincentre/statepensions.htm

EU pensions

There is no such thing as an EU pension as such but people who have worked in more than one member state of the EU may qualify for a pension from each country because of EU rules.

If you have paid social insurance contributions in 2 or more member states, you should apply for a pension to the member state in which you now live or in which you had your last contribution if you have no contributions in the state where you live. The authorities in the state in which you apply will then calculate with the other states exactly what is due to you from each of them.

Each state looks at your situation in two ways and then grants you whichever is most beneficial.

(a) They see if you can qualify for a pension on the basis of contributions paid in that state only

(b) They then look at your contributions in all member states and see what pension you would get if all of those contributions had been in their own state; they then calculate what proportion is applicable to them

You then get the higher of (a) and (b)

For example, a man who has worked 20 years in the UK and the last 16 years in Ireland is now approaching 66 and is looking for a contributory old age pension. His last 16 years in Ireland entitle him to a full contributory old age pension from Ireland so there is no need to take his UK contributions into account for that.

His UK contributions entitle him to some UK pension but not the full pension. The UK authorities calculate what the UK contributions on their own will give him. Then they do the alternative calculation - they combine the contributions paid in the two states, i.e., 36 years in total; calculate what that would give him if they were all paid in the UK and then calculate the proportion payable by the UK, i.e., 20/36 of that. The UK authorities then pay him the higher of the two calculations.

L1011

Generally they'll get the Irish non-contributory pension, which is only fractionally lower than the contributory anyway, as well as their foreign pension(s) so yes, they'll be getting more but they'll also likely be paying tax.

My grandfather had an Irish contributory via topup stamps (old system), a US SS pension and UK DHSS pension, due to having worked and paid contributions in all of them. US and UK were fractional but not insubstantial.

In your scenario, the man is getting his Irish contributory, and a fraction of his UK contributory.

Chris_5339762

To be honest I see no problem with this at all because the person has built up the required number of 'working years' in each country so of course they should be allowed the pension from both.

srsly78

Chris_5339762 wrote: »

To be honest I see no problem with this at all because the person has built up the required number of 'working years' in each country so of course they should be allowed the pension from both.

The thing is you can game the system somewhat.

You only have to work 20 years (??) to qualify for full contib pension. So consider:
A: Person that works in Ireland all their life, 40 years of contributions.
B: Person that works in Ireland for 20 years, and the uk (say) for 20 years.

Despite both working the same time, person B ends up better off having 2 state pensions.

So essentially people are penalised (oppurtunity cost) for not emigrating for some part of their lives?

I have contributions in Ireland, UK, Belgium and the Netherlands. What do I get?

Cody Pomeray

Yep that's one way of looking at it.

Apparently, you could currently qualify for a contributory pension with only 10 years of contributions.

So get out there and start building up your EU pension pots!