What Financial Cover does the Irish State Pension Offer?

The Irish State Pension is a form of social security provided by the government to citizens of Ireland who have reached the State Pension age. It is designed to provide financial support to individuals who are no longer in employment and can no longer rely on a regular income. It is an important source of income for many Irish citizens, particularly those who are retired or approaching retirement age.

In this blog, we will explore the financial cover that the Irish State Pension offers, including the eligibility criteria, the amount of the pension, and any additional support that may be available. We will also look at some of the common questions that people have about the State Pension and provide links to additional resources for more information.

‍

Types of State Pension in Ireland

There are currently two types of State Pensions in Ireland, Contributory and Non-contributory State Pensions. The Contributory State Pension, as is implied by the name, is available to individuals who have contributed to the system by way of PRSI payments over the course of their career. The Non-contributory State Pension is a lesser weekly payment and is available to individuals who made few, if any, PRSI contributions throughout their lifetime and is means tested.

‍

Eligibility Criteria for the State Pension

The requirements to be eligible for the Contributory and Non-contributory State Pension are different. To be eligible for either you must be of state retirement age, 66 years or older. In order to qualify for the Contributory State Pension you must be of State Pension age and must have made a minimum of 520 PRSI contributions over the tenure of your professional life.

The Department of Social Protection (DSP) now uses the newly implemented “Total Contributions Approach” (TCA)  to identify full Contributory eligibility and to calculate how much an individual is entitled to. This new approach takes into account the total of the PRSI contributions that you have made over the course of your employment history. The DSP also uses the Aggregated Contributions Method, when analysing your application for a pension. If you’ve reached pension age, 66, on or after September 1, 2012, your pension rate will be determined using these two methods. You must be 66 years of age or over and have enough Class A, E, F, G, H, N or S social insurance contributions (PRSI). These are also called full-rate PRSI contributions.

You need to:

1) Have paid PRSI contributions before a certain age and,

2) Have a certain number of paid PRSI contributions and,

3) Have a certain yearly average number of PRSI contributions since you first started to pay PRSI (this is the average rule) OR have a certain total number of PRSI contributions (this is the Total Contributions Approach).

The Non-contributory State Pension, on the other hand, does not take into account PRSI contributions. Instead, the DSP uses a means-test method to determine your sources of income, from your cash income to your shares, savings, property and investments. In order to qualify, you must have limited means and, as with the Contributory Pension, be an Irish resident.

The criteria for qualification and eligibility can be quite complex, so be sure to reach out to one of our pension experts here at FitzGerald Flynn Insurances if you’d like to learn more.

The amount of the Contributory State Pension depends on the number of social insurance contributions you have paid and your age at the time of retirement. The maximum amount of the State Pension is €265.30 per week for a single person, and €396.50 per week for a couple.

You can check roughly how much State Pension you might be eligible for by using the online pension calculator provided by the Department of Social Protection. Additionally, you can see the Contributory and Non-Contributory rates of pension by visiting the Citizens Information site.

‍

Additional Support for State Pensioners

In addition to the State Pension, there are a number of other supports available to State Pensioners. These include:

●       Fuel Allowance: This is a payment of €22.50 per week to help with the cost of heating your home. It is available to people who are over 66 years of age and receiving the State Pension or a social welfare payment, and who are living in a household with a gross annual income of less than €32,800.

●       Free Travel: State Pensioners are entitled to free travel on all public transport services within the Republic of Ireland. This includes buses, trains, and trams, and is available to people who are over 66 years of age and receiving the State Pension or a social welfare payment.

●       Medical Card: State Pensioners may be eligible for a medical card, which provides free access to public healthcare services. The eligibility criteria for a medical card depends on your age, income, and circumstances. You can apply for a medical card online or at your local health office.

●       Housing Support: There are a number of housing supports available to State Pensioners, including rent supplement, housing assistance payment, and the housing aid for older people grant. These supports are designed to help state pensioners with the cost of housing, and are available to those who are over 66 years of age and receiving the State Pension

‍

Common Questions about the State Pension

There are a few common questions that people have about the State Pension. Here are some of the most frequently asked questions, along with brief answers:

●       How do I apply for the State Pension? You can apply for the State Pension online or by contacting your local social welfare office. You will need to provide proof of your identity, proof of your social insurance contributions, and proof of your address.

●       When can I start receiving the State Pension? The State Pension age in Ireland is currently 66 years old. However, if you are under 66 years of age and have a reduced capacity for work due to illness or disability, you may be able to start receiving the state pension earlier.

●       Can I receive the State Pension if I live abroad? It is possible to receive the State Pension if you are living abroad, but you must meet certain criteria. You must have a minimum of 520 weeks (10 years) of social insurance contributions and be resident in Ireland at the time you claim the pension. If you are living in certain countries, you may also be eligible for an increase in your pension.

●       Can I receive the State Pension if I have never worked in Ireland? To receive the State Pension, you must have paid social insurance contributions. If you have never worked in Ireland, you will not have any social insurance contributions and will not be eligible for the State Pension.

●       Can I receive the State Pension if I am self-employed? If you are self-employed, you must pay self-employed contributions to be eligible for the State Pension. You can pay self-employed contributions through the Revenue Commissioners.

‍

Conclusion

The State Pension is an important source of financial support for citizens of Ireland who have reached the State Pension age. It is designed to provide a regular income to individuals who are no longer in employment and can no longer rely on a regular income.

For more information about the State Pension, including eligibility criteria, the amount of the pension, and additional support, you can visit the Citizens Information website (www.citizensinformation.ie). This website provides a wealth of information on social welfare payments, including the State Pension, and can help you understand your rights and entitlements. Additionally, if you have any questions relating to State, or any other types of pensions, please do not hesitate to contact FitzGerald Flynn today.

‍