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Pension Entitlements

Thursday, 18 March 2010

Teresa McCourt- Benefits Expert


Teresa Mc Court has been the Development Manager with Co Westmeath Citizens Information Service since 1997. The service runs 2 full time Citizens Information Centres, one in Mullingar and one in Athlone and Outreach centres in Castlepollard and Kilbeggan.


The service dealt with over 32,000 queries from members of the public in 2008 alone. The figures so far for 2009 are showing a marked rise on last year with close to 3000 queries in each of the first 2 months. The main issues people have are Employment, Social Welfare Heath and Housing, but the service also deals with queries on Education, Tax, Immigration and many other topics. Every effort is made to provide a high quality comprehensive and confidential service to the public. The service is free.


Teresa began her career as a civil servant working in the Department of Agriculture and the Department of Social Welfare. She studied Public Administration, Community Development , Psychology and also completed a Diploma with Open University in the Management Voluntary and Non Profit Organisations.


She remains actively involved in Community affairs in a voluntary capacity. She is a Board member of Athlone Community Services Council, Dr. Stephens Centre for the unemployed, The Midlands Support Agency and Citizens Information Phone Service.


In her role as a Development Manager she has initiated programmes such as a weekly "know your rights" slot on local radio which has been extremely successful.


The service runs public Information workshops on topics such as Pensions, Wills and Inheritance. And also gives presentations to Community groups on request.


In light of the economic crisis queries at the Westmeath CIC have become increasingly complex as more and more people are faced with unemployment.


Types of state pensions:


  • State pension contributory - At 66 - PRSI requirement
    State pension non contributory - at 66 - means tested
    Transition pension - at 65 if you retire from work

How do you qualify for a contributory state pension?


The conditions are complex - Start by checking your own PRSI Record.


Do this early before the age of 56 if possible. This will give you an opportunity to remedy the situation if you don't have enough contributions.


Get a pension forecast done early


What are the no. of Contributions required to qualify?
You need to:


. Have paid social insurance contributions before 56
. Have a certain number of social insurance contributions paid and
. Have a certain average number over the years since you first started to pay.


Example:


Anne started work at 18 in 1962 she worked until 1985 and she is 66 this year 2010.


Her record shows she has a total of 1196 PRSI contributions.
No. of years from age 18 to 66 is 48.


Her yearly average is 24, (1196 /48) so she will qualify for a slightly reduced pension.*

Average Yearly Contributions: 48 or over

Rate per Week: €230.30

Increase for qualified adult under 66: €153.50

Increase for qualified adult over 66: €206.30

Average Yearly Contributions: *20-47

Rate per Week: €225.80

Increase for qualified adult under 66: €153.50

Increase for qualified adult over 66: €206.30

Average Yearly Contributions: 15-19

Rate per Week: €172.70

Increase for qualified adult under 66: €115.10

Increase for qualified adult over 66: €154.70

Average Yearly Contributions: 10-14

Rate per Week:€115.20

Increase for qualified adult under 66:€76.80

Increase for qualified adult over 66: €103.20

The qualified adult rate is means tested. This is an important point for women who may feel that they will automatically qualify for this payment if their husband qualifies.


Point to note:


If you don't qualify for a contributory pension you may qualify for a means tested non -contributory pension.


If you have cared for children in the home under 12, you may qualify for "Homemaker" credits.


If you worked in another EU country you may be entitled to a pension from that country.

Can you tell us about the State Pension Non-contributory?
You may qualify if you:


. Are aged 66
. Living in Ireland
. Satisfy a means test
. Are habitually resident


What are the rates?


The rates are the same as the contributory pension but what you get will depend on your means.


The maximum rate of State Pension (Non-Contributory) in 2010:
State Pension (Non-Contributory): Rate per week (max):


Personal rate, aged 66 and under 80 €219
Personal Rate, Aged 80+ €229
Increase for a Qualified Adult €144.70
Increase for a Qualified Child €29.80


For the non-contributory pension, what is means tested? For example, if a couple has loan repayments (e.g. on a mortgage top-up / equity release) is this taken into account and subtracted from the household income?


Means test for Non cont pension - loans are not taken into account in the means test.


Also, for women who have worked all their lives in the home, what can they claim in their own right once they reach 65?
Women who have worked all their lives in the home, and therefore have very little paid contributions may apply for a means tested non cont. pension. This is why it is important that people enquire early enough aobut their pension entitlements. Under the present rules a woman could enter paid employment before she reaches 66 and earn just 38 euro and qualify for a full contributory at 66. Howev er this may change under the proposed new scheme.


What's the threshold for income to be assessed on? For example, if the weekly net income is less than €200, will they qualify for a pension?


If a person is 66 and applying for a means tested pension, the first 200 euro from any employment which they may have is not assessed against them.


What about women who left the workforce to raise a family? Are they entitled to a non-contributory pension?


If they worked and then took time out to raise children and perhaps returned to work at a later date, they will qualify for 'Home Makers Credits' for the years that they had children under 12. These credits can help them to qualify for a contributory state pension. (only introduced in 1994)


Alternatively they might qualify for the non contributory if they have means less than 200 euro per week.


As it's means tested, are household outgoings taken into account in assessing their eligibility for a pension? E.g. loan repayments?


No these things are not taken into consideration when assessing means for the old age pension.


What 'means' are tested?


AnswerEarnings over 200 euros per week each for a married couple are disregarded and also the first 20,000 euro for a single person and 40,000 for a married couple.


Can you tell us about the State Pension (Transition)?
How do you get this pension?


To get a State Pension (Transition) you must:


. Be 65 years of age
. Be under 66 years of age
. Be retired from work
. Have enough social insurance contributions.
What are the rates?
The rates are the same as the State Pension


PRSI conditions:
What do you need to have for this?
You need to:


. Have paid social insurance contributions before you are 55
. Have a certain number of social insurance contributions paid and
. Have a certain average number over the years since you first started to pay.


Can you work while drawing this pension?


Point 1: You cannot work while drawing the transition pension.
Point 2: It is proposed to abolish this from 2014


With the population becoming older, the government is talking about putting a new pension structure in place, how will this affect people?


Well this has been proposed by the government, but we don't have much detail on it yet.. And it won't affect people until 2014, up until 2014, at the moment, they can still retire at today's retirement age.


What they are proposing to do is the age at which people qualify for the state pension will be increased to 66 years of age in 2014, 67 in 2021, and 68 in 2028


PRSA's:


Personal Retirement Savings Accounts (PRSAs) are designed to be used instead of occupational pension schemes by employers who do not wish to sponsor such schemes. They may also be used to supplement occupational scheme benefits, as Additional Voluntary Contributions (AVCs) and as a substitute for personal pension schemes.


Employers must offer access to at least one standard PRSA to employees.


PRSA is an investment vehicle used for long term retirement provision by employees, self-employed, homemakers, carers, unemployed and any other category of person.
PRSA benefits will be determined by the contributions paid by and on behalf of the contributor and the investment return on those contributions.


The Pensions Board supervises the activities of providers in relation to their approved products and monitors compliance with the legislation regarding PRSAs. As part of the Boards regulatory role a register of PRSA providers and their products is available on their website. www.pensionboard.ie

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