No pension boost for farm assist clients

Thinking about pensions? For contributory state pension, you must be 66 or over, started paying PRSI before the age of 56, and have made at least 520 full-rate PRSI contributions. The latest changes bring years spent home-making or caring into the calculation.

By Stephen Cadogan

Guide to the Contributory State pension

There are no plans to amend the State contributory pension to award a maximum rate payment to pensioners who were in the farm assist scheme from 1999 to 2006, when they were exempt from PRSI, according to the Department of Employment Affairs and Social Protection.

The income of farm assist recipients was exempt from PRSI, and some recipients have ended up without sufficient social insurance contributions for a maximum state contributory pension.

Farm assist recipients who had previously paid social insurance had the option of paying voluntary contributions to maintain their social insurance record while on farm assist, if they satisfied the qualifying conditions.

Since January 1, 2007, those receiving jobseeker’s allowance and farm assist are subject to PRSI, if their annual income is €5,000 or more.

IFA has the following general advice for farmers on the contributory state pension.

What are the qualifying criteria for the contributory state pension?

    To qualify an individual must:

  • Be aged 66 or over. (This will rise to 67 in 2021 and 68 in 2028)
  • Have started paying PRSI contributions before reaching the age of 56 years.
  • Have made at least 520 full rate PRSI contributions.
  • Have a yearly average of 10 for a minimum pension, and 48 for the maximum pension paid.

What are the PRSI contribution types for self-employed?

PRSI for the self-employed was introduced in 1988.

All self-employed people aged between 16 and 66 with earnings more than €5,000 per annum must pay PRSI.

The PRSI paid by self-employed people is Class S.

If your income falls below €5,000, and you are under 66, you may apply to make voluntary contributions. Payment of voluntary contributions can help maintain or improve your contributory pension entitlements.

    From April 2015, to qualify to make a voluntary contribution, you must:

  • Have at least 520 weeks PRSI contributions paid under compulsory insurance in either employment or self-employment;
  • Make a voluntary contribution within 12 months of the end of the year during which you have last paid compulsory insurance. If you were previously self-employed, the voluntary contribution is €500.

How do I calculate my yearly average contributions?

The calculation is made by counting the total number of contribution years, beginning with the year you first started paying PRSI, up to and including the last full contribution year before you reach the age of 66. This is called your total contribution years.

Then you count your entire full rate paid contributions and credits over the same period, this is called your contributions and credits.

Your yearly average is calculated by dividing your contribution and credits by total contribution years.

How can I find out the number of PRSI contributions I have made?

For a copy of your PRSI contribution record, contact: Central Records Department, Department of Social Protection, McCarter’s Road, Ardarvan, Buncrana, Co Donegal, or Locall 1890 690 690

I assist in the farm enterprise with my spouse/civil partner, but am not an employee or in a farm business partnership, so I do not have any PRSI contributions in my own right. Are there any steps I can take to qualify to make PRSI contributions?

Possibly. Certain spouses and civil partners of people who are self-employed are able to access social insurance by paying PRSI, to build up entitlement to social insurance benefits as a self-employed worker. Prior to 2014, these categories of spouses or civil partners were excluded from social insurance.

    To qualify, they must demonstrate:

  • That she/he performs similar tasks as their self-employed spouse/civil partner;
  • and that her/his income from all sources exceeds the minimum self-employed insurability threshold of €5,000. The income from her/his contribution to the farm must be shown as trading income, or a share of the profits, in the pay and file return made in Revenue’s self-assessment system.
  • From March 30, 2018, changes to how the state pension (contributory) is calculated will be introduced. A person’s total social insurance contributions paid, rather than when they were paid, will be taken into account. A new homecaring credit will provide credited contributions for up to 20 years of homemaking and caring, benefiting those who spent time outside the paid workplace, while raising families or in caring roles.

Can my spouse, civil partner or cohabitant get a contributory state pension based on my record?

No, a person can only qualify for a contributory state pension based on their own PRSI record.

However, if your spouse or civil partner does not qualify for a contributory pension in their own right, or qualifies for a lower rate, you can apply for an increase for qualified adult on your pension.

This increase is subject to a means test.

    You will not get an increase if your spouse, civil partner or cohabitant:

  • Has gross weekly earnings of more than €310.
  • Is getting a higher rate social welfare payment in their own right (except disablement pension, supplementary welfare allowance, guardian’s payment, or child benefit).

If your spouse, civil partner or cohabitant has gross weekly means of €100 or less, you will receive the full increase for them. If they have gross weekly earnings between €100 and €300, you will get a reduced rate.

When and how do I apply for my Contributory State pension?

You should apply three months in advance of reaching the age of 66.

Application forms are available from your local social welfare office, post office or Citizens Information Centre.

If you need assistance, call the Department of Employment Affairs and Social Protection (Locall 1890 500 000). The completed application form should be returned to Social Welfare Services, College Road, Sligo.

If you do not claim within six months of becoming eligible, you could lose some payment.

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