Financial advice for teachers

Teach30 · 04-08-2020 4:17pm

rainbowtrout wrote: »

They are human, they make mistakes, someone can type a date in wrong, choose the wrong option from a drop down list on a computer system. This is why you have to check to make sure it's correct and get it fixed if it isn't.

With regard to the highlighted bit above. You are an adult, and should be capable of looking after yourself and learning to read a payslip and ensuring you are paid correctly is one of those things. Anyone that starts off new in our staffroom asks around in the first few months for information on their payslip and who to contact if they have questions, it's about taking responsibility for yourself. There's no point just leaving it and saying 'I've no clue of maths lol'. If you left school at 16, and were stacking shelves in a supermarket, you would get a payslip and you would be checking it to see if you got paid for the correct number of hours and if you got paid the right amount for overtime.

My first payslip 19 years ago, I didn't know what the terms meant on it, and there wasn't widespread access to internet in 2001 so I couldn't just google it. I nipped into the principal to ask. She said she didn't want to look at what I was earning to give me some privacy, I just told her I wanted to know what the various deductions meant etc, and she told me, and that was that.

If my pay is out by €5, I'll be checking my payslip to see why. It's not about the €5, I want to know why it changed and if it's a mistake.

Teachers are due a pay rise of 2% on the 1st October. That will be applied to the common pay scale, not the allowances, so I can calculate what the new value of my point on the pay scale will be. I would also be expecting to see my pay rise slightly in my payslip in mid October as a result, and if it doesn't I'd be asking other people in my staffroom if theirs changed. If they haven't, I know it's a delay at payroll's end and I will check again in the next payslip at the end of October, if mine hasn't changed and everyone else's has (unlikely) then I would know to check with payroll.

And in terms of what I'd be expecting. A 2% payrise at the point on the scale where I am is about an extra €1200 annually. So across 26 pay days that's approximately €46. At least half of that will be gone on tax. So I can expect an increase in my pay in October of in and around €23 per fortnight. It won't be exactly that, but it won't be far off.

Reading a payslip does not require training at third level, and it's not the lecturers job to do that.

The 80 comes from the fact that your pension is calculated by you receiving one-eightieth of your salary for each year that you work. You work 30 years, you get 30 eightieths.

Ok well I assumed checking my bank balance was the same thing. I never questioned it.
I’ve never once heard anyone ask about payslips in the staffroom and I’ve been in a lot of staffrooms. I’ve certainly never been asked!
The NQT courses might cover it though if it’s not relevant to college.

I’ve written out the pension bit to help me with it so thanks for trying to explain.
With regards to checking If I’m out money well I don’t know how much I should be getting which is why I’m here!

rainbowtrout · 04-08-2020 4:23pm

Teach30 wrote: »

Ok well I assumed checking my bank balance was the same thing. I never questioned it.
I’ve never once heard anyone ask about payslips in the staffroom and I’ve been in a lot of staffrooms. I’ve certainly never been asked!
The NQT courses might cover it though if it’s not relevant to college.

I’ve written out the pension bit to help me with it so thanks for trying to explain.

The easiest way to look at the pension for now is to look at the top point on the pay scale. Add your degree and dip allowances to it. This is the max you can earn without having a post. If you work for 40 years divide this total by 2. That is your max pension value.

https://www.tui.ie/welcome-to-our-website/common-basic-scale-wef-1110.5776.html

Top point on the payscale is 64302. I'm assuming you have honours degree and honours dip. The allowances for those (further down that webpage) are 1236 and 4918.

Total potential pay is 70456.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

StackSteevens · 04-08-2020 4:34pm

Teach30 wrote: »

Ha ha I have them but dont open them.
I’ve a bundle of revenue letters too but not opened either. Actually what do other people do with them? Should I bin them.

None of this was part of learning how to be a teacher..!

I appreciate everyone’s help.

I’m not worried about AVCs right now I’d prefer to get the basics right first and understand them before I move to all the pension stuff as at the moment I’m feeling overwhelmed with just this.

Again this is why I’ve never asked anyone else in the staffroom - I’m embarrassed that I’m clueless about it all and it’s easier not to ask then.

So, do you even know what a P60 is?

If you saw one running down the road, would you run after it!

Millem · 04-08-2020 4:34pm

rainbowtrout wrote: »

The easiest way to look at the pension for now is to look at the top point on the pay scale. Add your degree and dip allowances to it. This is the max you can earn without having a post. If you work for 40 years divide this total by 2. That is your max pension value.

https://www.tui.ie/welcome-to-our-website/common-basic-scale-wef-1110.5776.html

Top point on the payscale is 64302. I'm assuming you have honours degree and honours dip. The allowances for those (further down that webpage) are 1236 and 4918.

Total potential pay is 70456.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

I thought the pension amount did not include the state pension?

Teach30 · 04-08-2020 4:37pm

rainbowtrout wrote: »

.

If you remain in teaching for a long time, and you reach the top of the pay scale and stay on it for at least 10 years they give you a long service allowance as well. You would be working at least 35 years before you could get that. That's worth 2324. Add that to the total above and you get 72780.

Half of that if you work 40 years is 36390 of a pension when you retire. That figure would be inclusive of the state pension which is about 12k. You are also entitled to a tax free lump sum which is three times the pension, so 36390 x 3 = 109,170 on retirement.

Actually if you look at your payslip and look at the gross pay value and multiply it by 26, you will get your annual pay. Subtract the allowances above for the degree and dip and it will leave you with a value which you should be able to match on the payscale and figure out what point you are currently on. It might be out by a euro or two because of rounding, but you should be able to pinpoint it to Point 12, 13 or 14

Thanks for taking the time to type that out. I was way off the mark with my workings.

I’ve never though about Early retirement. I assume I keep going until 68. Maybe for another thread pros and cons of going earlier..
What age do most teachers retire at?

Geuze · 04-08-2020 4:38pm

Teach30 wrote: »

Teaching was the first job I ever had and I genuinely assumed the payroll people would have to get it right.
As for asking in staffroom I’d be far too mortified, even here I still don’t understand the pension thing, where does the 80 number come from?

I really appreciate everyone helping me but I could do without the your so silly tone. I know I am and I’m trying to fix it. I don’t care if I’ve missed out on money And tax credits all along thats my own fault but I’m trying to amend things now. Thanks for trying to help me all the same

Tax is your responsibility.

You must check your own tax credits and SRCOP.

The DES payroll do not check them.

The 1/80 is easy.

Think about it, the scheme is based on providing half final salary as a pension.

It is based on forty years.

So for each year you pay in, you accrue 1/80 of the benefits.

After forty years, you have 40/80 of salary as pension.

Teach30 · 04-08-2020 4:39pm

StackSteevens wrote: »

So, do you even know what a P60 is?

If you saw one running down the road, would you run after it!

I’d suggest a p45 for your helpfulness.

P60 - I know what it is I don’t know what to use it for.

If you’d care to explain do seeing as you know it all.

rainbowtrout · 04-08-2020 4:44pm

Millem wrote: »

I thought the pension amount did not include the state pension?

Pre 95 teachers it is not included, they pay D rate PRSI. Post 95 pay A rate PRSI so effectively it makes up part of the pension. If you finish on full service 60K and are entitled to pension of 30k, 18k of that comes from teaching pension and rest from the state. If you retire before 65 (or 67, 68 wherever we will be in the future) you can apply to get a payment in lieu of pension payment, which essentially amounts to the same thing.

rainbowtrout · 04-08-2020 4:48pm

Teach30 wrote: »

Thanks for taking the time to type that out. I was way off the mark with my workings.

I’ve never though about Early retirement. I assume I keep going until 68. Maybe for another thread pros and cons of going earlier..
What age do most teachers retire at?

The oldest person in my staffroom is 57ish. There are only 6 people (out of about 40) people 50 or over in my staffroom and that includes the Principal and DP, and one teacher who went into teaching late in life (40s).

Lots of teachers try and get out in their 50s. But teachers who started after 2004, and you are in this cohort, can retire in their 50s but they cannot draw down the pension until they reach 65, so if you wanted to go early you would have to have another source of income to bridge the gap.

Teachers who started before 2004 can go from the age of 55 onwards once they have 33 years done and their pension is paid out to them there and then. Last few years in my school has seen a number of teachers go in their mid 50s, they felt burned out and didn't want to do another 5 years. Can take a slightly smaller pension and work part time at something else or do grinds if they want to make up the shortfall.

Millem · 04-08-2020 4:48pm

rainbowtrout wrote: »

Pre 95 teachers it is not included, they pay D rate PRSI. Post 95 pay A rate PRSI so effectively it makes up part of the pension. If you finish on full service 60K and are entitled to pension of 30k, 18k of that comes from teaching pension and rest from the state. If you retire before 65 (or 67, 68 wherever we will be in the future) you can apply to get a payment in lieu of pension payment, which essentially amounts to the same thing.

Oh gosh I thought we got state pension on top

Geuze · 04-08-2020 5:22pm

Teach30 wrote: »

Ok so on my payslip it says on one line
Tax credit 126.92 and cut off point is 1357.69 and on the built underneath it’s
Tax credit 1650 and cut off point is 17650.00

Tax return is foreign to me..

Please note that thousands of teachers do tax returns each year.

126.92 * 26 = 3300

The tax credits are correct, except you are missing the third one, the flat-rate expenses tax relief.

Teach30 · 04-08-2020 5:34pm

Geuze wrote: »

Please note that thousands of teachers do tax returns each year.

126.92 * 26 = 3300

The tax credits are correct, except you are missing the third one, the flat-rate expenses tax relief.

Ok so when revenue post me my log in details I’ll go do that. Can’t say I’ve heard teachers talk about doing tax returns I thought that as for self employed people.
Once I log in will it be straightforward? Also where did u get the x 26?
Sorry for all the questions.

rainbowtrout · 04-08-2020 5:56pm

Teach30 wrote: »

Ok so when revenue post me my log in details I’ll go do that. Can’t say I’ve heard teachers talk about doing tax returns I thought that as for self employed people.
Once I log in will it be straightforward? Also where did u get the x 26?
Sorry for all the questions.

You get paid 26 times per year. Your total tax credit is divided by 26 to show what your fortnightly tax credit is.

Some teachers would have work on the side so would do a tax return. Also the revenue pick people at random and get them to complete a tax return, even if they are PAYE all the way. It often happens if you are in receipt of some sort of tax break. I live in the north west and got Section 23 relief when I bought my house and for years after that got the form to do the tax return each year when I had it.

I also do a bit of work that is classed as self employed, so I have an accountant to do that end of things for me each year.

Millem · 04-08-2020 6:03pm

You should request a balancing statement if you have any medical expenses. You get 20% back.

am_zarathustra · 04-08-2020 6:13pm

Teach30 wrote: »

Hi thanks yes I’m full time.
Total earnings is 2310.19 and yes paid fortnightly.
Net pay is 1472.47

So your gross pay is 2310.19 x 26 as you are paid every 2 weeks. This means your total gross pay is 60,064.94

Then take away allowances, I assume degree and teaching diploma so 1236 and 4918 for a total of 6154.

60,064.94 - 6154 = 53, 910.94

so increments you are closest to are

13 €52,720
14 €54,584

Do you do S and S? You are definitely one of these anyway, either 13 or 14.

Geuze · 04-08-2020 6:16pm

Teach30 wrote: »

Ok so when revenue post me my log in details I’ll go do that. Can’t say I’ve heard teachers talk about doing tax returns I thought that as for self employed people.
Once I log in will it be straightforward? Also where did u get the x 26?
Sorry for all the questions.

I think teachers are paid fortnightly? I'm sure they are.

Therefore x 26 to get annual figures.

I have helped many teachers do tax returns.

I do tax returns for a relation who is a teacher each year.

People don't tend to talk about it.

Anybody who has medical expenses must do a tax return to get tax relief.

am_zarathustra · 04-08-2020 6:19pm

Teach30 wrote: »

Ok so when revenue post me my log in details I’ll go do that. Can’t say I’ve heard teachers talk about doing tax returns I thought that as for self employed people.
Once I log in will it be straightforward? Also where did u get the x 26?
Sorry for all the questions.

I've gone through tax and payslips with loads of teachers in the school, Ive looked through their taxes and explained parts to them. It's completely normal. I know a shocking amount about some of the staff finances.

It's grand to ask, not asking at the start just means you put it off and it's always important to know where you stand.

Tax and pay are down to you. I've seen people paid 10 grand over what they should have been and they've had to pay it back.

Teach30 · 04-08-2020 7:05pm

am_zarathustra wrote: »

So your gross pay is 2310.19 x 26 as you are paid every 2 weeks. This means your total gross pay is 60,064.94

Then take away allowances, I assume degree and teaching diploma so 1236 and 4918 for a total of 6154.

60,064.94 - 6154 = 53, 910.94

so increments you are closest to are

13 €52,720
14 €54,584

Do you do S and S? You are definitely one of these anyway, either 13 or 14.

Thanks for that, I’ve sent the financial section an email and can only but wait and see what they say to me.
At least everything else is correct. I’ll do the expenses thing too.

I asked my family and the accountant does all this for them they’ve never used into revenue online themselves.

I might look at getting an accountant down the line but will do it myself for now.

Would be great to go from point 12 on scale to 14 if it’s wrong.

rainbowtrout · 04-08-2020 7:22pm

am_zarathustra wrote: »

So your gross pay is 2310.19 x 26 as you are paid every 2 weeks. This means your total gross pay is 60,064.94

Then take away allowances, I assume degree and teaching diploma so 1236 and 4918 for a total of 6154.

60,064.94 - 6154 = 53, 910.94

so increments you are closest to are

13 €52,720
14 €54,584

Do you do S and S? You are definitely one of these anyway, either 13 or 14.

It looks like Hons Degree, Pass Dip and Point 14.

4198 + 591 + 54584 = 60093

Allowing for rounding at different times of the year that comes within €30

Millem · 04-08-2020 7:37pm

Multiply by 26.09 not 26.

Teach30 · 04-08-2020 8:10pm

Millem wrote: »

You should request a balancing statement if you have any medical expenses. You get 20% back.

I thankfully dont have medical expenses but will add this to my list of things to remember.

Found 3 cheques for travel expenses from inservices today too that are well out of date by now, I’m So bad at all this..!

rainbowtrout · 04-08-2020 8:38pm

Teach30 wrote: »

I thankfully dont have medical expenses but will add this to my list of things to remember.

Found 3 cheques for travel expenses from inservices today too that are well out of date by now, I’m So bad at all this..!

Even going to the doctor for a check up and paying €50 is eligible. It’s only a tenner back but it all adds up.

Geuze · 04-08-2020 8:59pm

Teach30 wrote: »

I might look at getting an accountant down the line but will do it myself for now.

100% no need for this.

Cost way too much.

I do my own tax return in 30 mins.

Would you pay several hundred for 30 mins work?

I do tax returns for teachers with five or six incomes in maybe an hour tops.

(pension + wages + grinds income + ARF, plus medical expenses, etc.)

Teach30 · 04-08-2020 9:34pm

Geuze wrote: »

100% no need for this.

Cost way too much.

I do my own tax return in 30 mins.

Would you pay several hundred for 30 mins work?

I do tax returns for teachers with five or six incomes in maybe an hour tops.

(pension + wages + grinds income + ARF, plus medical expenses, etc.)

When your as unsure as I am about all of this yes I probably would pay. My fiancé suggested an accountant too he has never used revenue online either for taxes etc. He was no help when I asked!

Would be handy to have a friend like you who would do it for me I can see why people ask you as you find it so easy!

On the getting money back from doctor dentist etc.. last time I was in the dentist he asked me for PPS number and it ended up only costing €20. Is this something to do with claiming it? Thanks never though to ask the secretary. He just used the number.

rainbowtrout · 04-08-2020 10:10pm

Teach30 wrote: »

When your as unsure as I am about all of this yes I probably would pay. My fiancé suggested an accountant too he has never used revenue online either for taxes etc. He was no help when I asked!

Would be handy to have a friend like you who would do it for me I can see why people ask you as you find it so easy!

On the getting money back from doctor dentist etc.. last time I was in the dentist he asked me for PPS number and it ended up only costing €20. Is this something to do with claiming it? Thanks never though to ask the secretary. He just used the number.

Your PRSI entitles to you to certain free treatments, say once a year. I think with the dentist it is a clean and polish, so he submits a claim to revenue and they reimburse him against your PRSI number, and you just paid him the balance for whatever else was done. Because that claim has been made you can't go back and get the same treatment within the timeframe allowed.

You are also entitled to a free eye test and an allowance towards glasses every two years. I got my eyes tested as I needed glasses for the first time two years ago and had a check up only about two weeks ago for free, again paid for by PRSI.

https://www.citizensinformation.ie/en/social_welfare/social_welfare_payments/disability_and_illness/treatment_benefit_scheme.html

mirrorwall14 · 05-08-2020 11:48am

Can I jump in and check my understanding?

I’m ETB though did some DES work. Does this affect pension?

I’m teaching since sept 2011 in ETB. Before that was a mix of mostly private with some DES hours for two years. It will not count as a year pension I’m sure.

I will be 66 in Sept 2051 for forty years of service. I know I can’t retire early. However I think I go at 65? And I think I can buy back that year to have full pension at 65? Who deals with ETB pensions?

And I don’t understand the pension age changes. If I have 40 years done (using buy back and Actual service) at 65 do I get a pension until I’m 68? Or how do I survive?

Thanks

rainbowtrout · 05-08-2020 11:58am

mirrorwall14 wrote: »

Can I jump in and check my understanding?

I’m ETB though did some DES work. Does this affect pension?

I’m teaching since sept 2011 in ETB. Before that was a mix of mostly private with some DES hours for two years. It will not count as a year pension I’m sure.

I will be 66 in Sept 2051 for forty years of service. I know I can’t retire early. However I think I go at 65? And I think I can buy back that year to have full pension at 65? Who deals with ETB pensions?

And I don’t understand the pension age changes. If I have 40 years done (using buy back and Actual service) at 65 do I get a pension until I’m 68? Or how do I survive?

Thanks

I would say first of all check if your hours in DES prior to 2011 have been included in your years of service. ETB should be able to tell you that. If they haven't contact DES for a statement of service which you can give to your ETB.

Assuming for the moment that it's not included and you have 39 years of service at 65, you would be entitled to buy back one year. You would contact payroll in your ETB if you want to do that. You might also find the cost of buying back a year is not worth the value of what it would add to the pension. Worth sitting down and doing a few calculations.

You will be eligible for your teaching pension at 65. Technically you are only entitled to the teaching part of it not the state part of it at that point, so for the example I've done above if your final pension was 30k, you would be entitled to 18k at 65 and state part at 68. However teachers can apply for what is known as the supplementary pension to bridge that gap until they are eligible for state pension. So it kind of works out the same. You would also be eligible for your lump sum.

https://www.education.ie/en/Education-Staff/Services/Retirement-Pensions/Teaching-Staff/Supplementary-Pensions/FAQs.html

StackSteevens · 05-08-2020 3:05pm

Teach30 wrote: »

Thanks for that, I’ve sent the financial section an email and can only but wait and see what they say to me.

At least everything else is correct. I’ll do the expenses thing too.

I asked my family and the accountant does all this for them they’ve never used into revenue online themselves.

I might look at getting an accountant down the line but will do it myself for now.

Would be great to go from point 12 on scale to 14 if it’s wrong.

Try to be positive about it! And bear in mind that since you had the brains to get a degree and a H Dip then you definitely have the brains to manage your own salary and tax affairs! It's a cliché, but it really isn't rocket science.

Furthermore, if you master the topic before your fiancé does, then after you're married, you can transfer some of his tax credits over to you and he won't even know!!!

amacca · 05-08-2020 8:14pm

amacca wrote: »

I had no idea it was cheaper the earlier you do it......is there a formula or something available

Not hijacking but still curious about my own question from earlier in the thread, i think a poster suggested it was cheaper to buy back notional service the earlier you do it.....is this the case, to me it would be something you would consider if it made sense coming to the end and you would be in a better position to weigh up proscand cons then depending on your individual situation......but is it actually cheaper if buy back early

am_zarathustra · 05-08-2020 8:37pm

amacca wrote: »

Not hijacking but still curious about my own question from earlier in the thread, i think a poster suggested it was cheaper to buy back notional service the earlier you do it.....is this the case, to me it would be something you would consider if it made sense coming to the end and you would be in a better position to weigh up proscand cons then depending on your individual situation......but is it actually cheaper if buy back early

Standard pension practice means he closer you are to retirement, the less time your contribution has to accrue interest therefore the less value it has. The maths is amortization I assume, so 200 euros in your pension pot when your 25 is worth a nice amount by the time you are 65/68 but if you put 200eu in when you are 60 it won't be worth as much.

https://www.pensionsauthority.ie/en/employers/checklists_and_guides/purchase_of_notional_service_and_avcs.pdf

The calculations are very specific to individuals but the department will cost it for you. You can pay in a lump sum or in smaller amounts over time

StackSteevens · 05-08-2020 10:30pm

amacca wrote: »

.but is it actually cheaper if buy back early

It certainly seems cheaper - because the earlier you start, the smaller the periodic deductions from salary will be!

Note: If you are in the Single Pension Scheme ( employed after 1st Jan 2013) you cannot purchase notional service.

And see this page for more info relating to teachers.

https://www.education.ie/en/Education-Staff/Services/Retirement-Pensions/Teaching-Staff/Notional-Service-Scheme/

am_zarathustra · 05-08-2020 10:51pm

https://www.education.ie/en/Education-Staff/Services/Retirement-Pensions/notional-service-purchase-scheme-for-teachers-general-information-nsq10-.pdf

It's worth having a look at this. The tables they mention are here http://www.cspensions.gov.ie/

Basically buying a year is dependent on your age and the number of years you want to apply for. The actuarial tables are used for this. You can ask the department too do this any time for free and they will send you the estimate. I'll have to buy a couple of years back at some point and plan on doing it as soon as I can (hoping to buy a house in the next few months.....so after that)

Financial advice for teachers

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