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Pension: Better off not taking that summer job?

  • 13-06-2016 2:53pm
    #1
    spuddy
    Registered Users, Registered Users 2 Posts: 823 ✭✭✭


    I've been looking into the situation with regard to the Contributory State Pension. From what I've read, in addition to having the required number of stamps/contributions (520/10 years' worth), there's also an average factored into the eligibility criteria.

    You must have 48 contributions per year on average, calculated from the point in time in which you first start paying into the system. Anything less than this, and your pension will be reduced.

    This got me thinking, is taking a summer job in secondary school or college actually a bad idea from a pension stand point, as you start paying into the system before you can earn on a full time basis, and thus lower your working-life average?

    Perversely, if you were to wait to start working until you were 56, you'd qualify for the full pension on retirement age.

    Have I misunderstood something?
    Tagged:


Comments

  • #2
    wokingvoter
    Closed Accounts Posts: 828 ✭✭✭wokingvoter


    If your still a student now then I would definitely take the summer job because the con state pension as we know it will have disappeared by the time you are pension age.
    For one thing pension age is already rising from 66 ( it was 65) to 67 and 68 in the next few years.
    In a few short years it is proposed that instead of 10 years minimum contributions ( until 10 years ago it was 5 years minimum) you will need at the very least 30 years contributions to get even the minimum amount of pension.
    Every young person commencing they're working life now needs to get advice about a private pension because your PRSI is going to get you less and less and for a shorter amount of time.
    Joan Burton "fixed" a few "anomalies" here's an example
    If you qailified for the State pension (known as Transition Pension , it's gone now)at 65 up to the 1st September 2012 and you only had an average of 20 contributions, you would be getting €228 per week, only €5 less than the pensioner who didn't quailify till 66 with and average of 48.
    Burton changed all that and some women in particular lost out very badly


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