Making voluntary PRSI contributions

kelzer

Hi,

I am checking through my PRSI contributions online on MyWelfare.ie and I noticed a few years do not have the full amount. Some are 28A 26A 44A etc. Is it possible to make a voluntary contribution to make up to the full 52A amount? Would this be advisable and how much would it roughly cost?

I also noticed that in 2022 (where I claimed unemployment benefit for around 3 months) I paid 31A contributions and 19 were credited. Does the credited number mean the time I was on unemployment benefit?

Thanks

hawthorne

Voluntary social insurance contributions (citizensinformation.ie)

38673_656d7d9c50a74c3a8b586ac024431236.pdf

It looks to me that your credits are all due to your time as an unemployed person.

hawthorne

gov.ie - Operational Guidelines: PRSI - PRSI Voluntary Contributions (www.gov.ie)

kelzer

https://www.boards.ie/discussion/comment/120311646#Comment_120311646

What do you mean by all due in this case? Quite confusing documentation. Seems like you can only pay voluntary contributions within 12 months of the date you want to cover.

Viscount Aggro

it can be expensive. I was missing 10 weeks PRSI stamps.. they asked me for EUR700 to make voluntary payment.

A percentage of your previous year's PAYE income.

kelzer

That's expensive for sure. Are the credited weeks equivalent to the prsi contributions made through payroll?

hawthorne

https://www.boards.ie/discussion/comment/120321841#Comment_120321841

Wrong. The documentation is quite clear about the whole subject. All the credits you see in mywelfare.ie are credits assigned to you for times of unemployment.

And you have more than 12 months time to pay your voluntary contributions:

• "Apply to make your voluntary contribution within 60 months (5 years) of the end of the last completed tax year (contribution year) during which you last paid compulsory insurance or you were last awarded a credited contribution. (Since February 2017, the time limit for making voluntary contributions was extended from 12 months to 60 months.)"

hawthorne

https://www.boards.ie/discussion/comment/120322543#Comment_120322543

The credits substitute your missing contributions. This helps you to keep up your entitlement to some SW benefits.

SCOOP 64

Does the unemployment credits still Count overall at your retirement ?

hawthorne

https://www.boards.ie/discussion/comment/120325110#Comment_120325110

Yes- they all count if you have at least 10 years of paid contributions on your own pension day. However, it is supposed to change in the near future. The pension reform will put a cap on the amount of credits you can use for your contributory pension. No legislation has been passed yet- it is all still a proposal. We have to wait and see.

kelzer

How many contributing years do you need to qualify for the full state pension? What happens to partial years that are not the full 52 reckonable contributions? Is it total PRSI contributions divided by numbers of years paid into the system to get the yearly contribution average?

hawthorne

https://www.boards.ie/discussion/comment/120328887#Comment_120328887

There are two systems for the contributory pension in force at the moment. For both systems you need at least 520 full contributions to get a minimum payment.

Under the average system you need a yearly average of 48 or more contributions/credits. Partial years are counted as well. Their weight is only less than a full year. The years counting start with the year you start working and end with the year you reach pension age. Yes- the sum of those years are used to divide the sum of your contributions to get your average. This system will be phased out over the next 10 years or so.

Under the new TCA system you need 2080 contributions by the time you reach pension age. There are a variety of possibilities to substitute missing contributions by credits from times of unemployment/illness/ childcare/caring. Cap is 20 years under certain conditions. This system will be the only way to calculate your pension in 10 years or so.

State Pension (Contributory) (citizensinformation.ie)

TooTired123

https://www.boards.ie/discussion/comment/120328887#Comment_120328887

Im really loathe to talk to people about entitlement to pension and PRSI etc unless they are retiring in the next few years. Right now the dept are processing your application in 2 different ways and then giving you whichever is the most beneficial to you.

But we have a mounting pension crisis which the government keep TRYING to deal with but must back down every time in the face of opposition.

There is basically too many pensioners and not enough people paying tax/PRSI to meet the bill every week.

With more and more people living to very great ages due to medical advances, and less people working and claiming other SW benefits (we have the highest welfare rates in the EU) then it just isn’t going to continue.

Something’s gotta give soon.

So my advice is.. keep either working and paying PRSI or signing for credits. If you can make voluntary contributions for any gaps do that, but there’s no garuntee you’ll get a return on that.

kelzer

So I just received my letter from Welfare stating how much it will be to pay voluntary contributions for missed payments in 2022. Just for clarification I have 31 paid (class A) and 19 credited contributions in 2022. So in theory I only needed to pay 1 week. The figure they came back with was €1778.77. Does this seem accurate?

For 2020 in comparison, I have 51 (class A) paid contributions. The figure for voluntary contributions is €74.88. Is it worth paying the €1778.77?

GerryCarry

https://www.boards.ie/discussion/comment/120322867#Comment_120322867

I don't understand. How are you given "credits assigned to you for times of unemployment"? I would have thought if someone was on JSA for a long time, like 10 years, then they should be given nothing. Are you saying they still get credits assigned and so could still claim the full contributory pension using these assigned credits for times they were unemployed?

TooTired123

https://www.boards.ie/discussion/comment/120505276#Comment_120505276

It’s far too complicated to explain here, but the answer to your question re remaining on JSA allowance for years and qualifying for full state pension is, no that’s not possible.

To get a basic understanding of State pension you need to read this https://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/older_and_retired_people/state_pension_contributory.html

and this, for a start.

https://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/social_insurance_prsi/credited_social_insurance_contributions.html

hawthorne

https://www.boards.ie/discussion/comment/120505361#Comment_120505361

https://www.boards.ie/discussion/comment/120505276#Comment_120505276

That is possible. But it would be an extreme case and very rare. Somebody could work for 10 full years- and qualify that way for entering the contributory pension system. Afterwards that person must spent the rest of his/her working life on JSA, getting a credit every week. Reaching pension age that person must have- under the old average system- a yearly average of 48 or more contributions and credits. The accumulated credits count like contributions once you have paid in 520 contributions. It is one of the anomalies the old system has- and one of the reasons it is going to be changed over to the new system.