Recently unemployed, question about pension credits

techguy

Hello,

I have recently become unemployed, voluntarily. I am not seeking any benefits such as jobseekers etc.

Some people have mentioned that I need to sign on weekly in order to ensure my state pension is not affected by my unemployment. I'm not sure about any of this so asking how it can affect me if unemployed for a while.

Background, I plan on remaining unemployed as a PAYE employee for the remainder of the year. I may do some project work which will be done on a self employed basis. I will then travel to work in the UK come January.

Any advice regarding pension benefits would be greatly appreciated.

Thanks

Cushie Butterfield

I think you should be looking at Voluntary Contributions http://www.welfare.ie/en/Pages/Voluntary-Pay-Related-Social-Insurance-PRSI-Contributions.aspx rather than signing for credits. Once you start working again (PAYE or self-employed) you stop paying the VCs.

You're in a different situation than most people who post in this forum, as it looks as if you are about to fall between the cracks of (or at least transtioning between) PAYE/unemployed/self-employed/self-assessed for taxation purposes.

Usually people who are registered as unemployed or ill & claiming a social welfare payment automatically receive credited contributions 'built in' with their benefit claim. Some people who are registered as unemployed or ill & claiming a means tested social welfare payment don't automatically get these credits, but some do. Some people sign on just for credits & receive no payment from DSP. The problem is that to be registered for any jobseeker's payment you are meant to be available for & actively seeking employment & if you are registered as ill you are usually not meant to work (there are certain exemptions to this but in your case it's not relevant anyway). The reason why people are credited/sign for credits is so that their PRSI record remains intact, mainly so as down the line they will qualify for a state contributory pension, as well as for a prsi record based illness or jobseeker's benefit claim in the shorter term.

Read these for the difference between State Pension Contributory & State Pension Non-Contributory:
http://www.welfare.ie/en/Pages/Qualifying-for-State-Pension-Contributory.aspx
http://www.welfare.ie/en/Pages/248_State-Pension-Non-Contributory.aspx

Have a look here for further info on PRSI contributions as regards DSP recipients. http://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/social_insurance_prsi/credited_social_insurance_contributions.html

You will also have to check & see how you would be classed by Revenue as regards being a chargeable person. You will get more info on that over on the Taxation forum, but as far as State Benefits goes you are looking at Voluntary Contributions rather than ''signing for credits''.

Bear in mind that if you are entitled to Jobseeker's Benefit you would automatically get credited contributions, but you must be actively seeking work & be able to prove it. Because you left employment voluntarily you may not be entitled to an actual payment for up to nine weeks but you would receive credited contributions even during that time. However seeing as you have said that you won't be seeking employment you wouldn't be eligible for any jobseeker's payment.

eastbono

In order to have a credited contribution claim the OP also needs to actively seeking full time work. The OP states that their intention is to remain unemployed for the remainder of the year but do some freelance work.

Cushie Butterfield

eastbono wrote: »

In order to have a credited contribution claim the OP also needs to actively seeking full time work. The OP states that their intention is to remain unemployed for the remainder of the year but do some freelance work.

Yes, see post #2

eastbono

Cushie Butterfield wrote: »

Yes, see post #2

I saw that post but is only mentions jobseekers payments. A credit claim is not a payment claim. I was just clarify that the same criteria applied to a credits claim.

Cushie Butterfield

eastbono wrote: »

I saw that post but is only mentions jobseekers payments. A credit claim is not a payment claim. I was just clarify that the same criteria applied to a credits claim.

Lol - but he's not making a credit claim!

Voluntary contributions are a payment that he would make into the social insurance fund until he did resume employment in one form or another, in order to safeguard his longterm PRSI record with the view to maintaining his eligibility for Contributory State Pension.

eastbono

Mea culpa...its been a long day.

He cannot make voluntary contributions for this year until January 2015. I have been in touch with this section myself about voluntary cons for this year and that was what I was told. Also I believe they are quite expensive.

Cushie Butterfield

eastbono wrote: »

Mea culpa...its been a long day.

He cannot make voluntary contributions for this year until January 2015. I have been in touch with this section myself about voluntary cons for this year and that was what I was told. Also I believe they are quite expensive.

Yea, you have to wait till beginning of following year. It can be quite expensive - minimum €500 or 6.6% for class A but can be well worth it depending on differing circumstances. It can also be extremely beneficial in cases of Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension.

techguy

Thanks folks,

I've been doing a bit more investigating. So, my understanding is that if I have a gap in payments I will lose out on my contributory pension come retirement. Whats the deal if I go self employed, do I lose out?

Also, if I work outside the country for a considerable amount of time 1-2+ years then there will be a decent gap in contributions. Does that mean I also lose out?

It's a bit of a mess and I believe a lot of people don't have this contributory pension for a number of reasons?

It's seems like a very easy thing to lose and something I will likely lose in the future.

Maybe i'll just leave it off and not bother with the hassle! I'm not forking out €500 now either way!