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Break in PRSI contributions

  • 27-08-2018 8:10pm
    #1
    yellow hen
    Registered Users, Registered Users 2 Posts: 4,037 ✭✭✭


    PRSI complete novice so apologies.....

    I'm currently on a 2 year career break and during this time will not be making any PRSI contributions. I understand from this- that it won't impacvt my state pension in the future but what will it effect? Can/Do I need to make contributions on this break and if so, why?
    thanks.


Comments

  • #2
    Turnipman
    Closed Accounts Posts: 789 ✭✭✭Turnipman


    yellow hen wrote: »
    PRSI complete novice so apologies.....

    I'm currently on a 2 year career break and during this time will not be making any PRSI contributions. I understand from this that it won't impact my state pension in the future but what will it effect? Can/Do I need to make contributions on this break and if so, why? thanks.

    Your Contributory State Pension will be calculated on the basis of the PRSI contributions that you paid during your lifetime. Hence, not paying any PRSI for 2 years will adversely affect the value of your pension when you retire.

    If you re-read that link you referred to, you'll notice that it refers to voluntary contributions.
    "Minister for Social Protection Leo Varadkar has reformed the PRSI system to make it easier to take a career break without losing your State pension entitlements.

    The reforms make it easier for people to make voluntary contributions under the PRSI system. They are designed to ensure that more people who take career breaks, early retirement, move abroad temporarily, or experience a bad year in self-employment can protect or improve their right to a contributory State pension, and a pension for their spouse or child's guardian should they die prematurely."


    You need to investigate whether you can make voluntary contributions during your career break, if you can then you probably should, but that's your call.

    The reforms give you 5 years to make up your mind whether you want to make voluntary contributions, so you can postpone doing so until you're back at work and have an income.


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