I have a query about your recent article explaining the application process regarding a UK state pension. My question is whether I must pay Class 2 or Class 3 contributions. I have completed all the necessary steps including the online application, I do qualify to buy back the years I need to avail of a full UK pension which is great. I have been advised that I need to call The Future Pensions Dept as I may qualify to pay Class 2 contributions.
I was born in Derry and worked as a nurse for 16 years, so I have 16 full years national insurance contributions. I moved to Wexford in 1993 and worked as a nurse until 2016 when due to ill health I had to retire at the age of 54. I have been in receipt of an invalidity pension from Social Welfare since 2016, plus a small pension from the HSE and a very small pension from the HSC (UK health service.)
I would greatly appreciate your advice on this matter and it would be great to have a clear understanding of the contributions I need to make.
Ms J O’H
Unsurprisingly, given how many Irish people have spent some time working in the UK, there has been a huge response to the original piece about the opportunity to make up to 17 years of voluntary national insurance contributions and either beef up your future UK state pension or qualify for one in the first place.
And one of the most frequent follow-on queries is precisely what you mention – the Class at which you will be required to make contributions.
That’s not surprising as there is quite a difference in the amounts it will cost you. Class 2 contributions are payable at £3.45 per week while Class 3 is payable at £17.45.
For someone buying back the full 17 years, Class 2 would cost just shy of £3,050 (€3,678) while doing the same under Class 3 would cost a beefier £15,425 (just over €18,600).
You get a maximum UK pension with 35 years of contributions so for those needing to buy back fewer years, the figures are £179.40 (Class 2) or £907.40 (Class 3) per year.
Your experience is not unusual. When you go through the automated process on the app or online, the figures presented to you are the cost of purchasing Class 3 contributions. However, if you were working right up to the point when you left the UK, you might be eligible for Class 2.
The online system knows this which is why it refers you on to the Future Pensions Department, as you say.
So what determines Class 2 or Class 3?
First up, you need to have lived in the UK for three years in a row or have three years of paid or credited Class 2 contributions before leaving the country.
Clearly you meet this criteria.
Thereafter, if you are now living “abroad”, as you are, and you worked in the UK immediately before leaving that jurisdiction and you worked when you went abroad (or came home in your case) or currently work abroad, you should qualify to pay the much lower Class 2 contributions.
If you were not working immediately before you left the UK or you didn’t work after leaving, you will be paying at Class 3.
To reiterate, abroad in this context means outside the UK, so working in the Republic constitutes abroad even though for the Irish people looking to apply for this pension boost, it is home.
It sounds as though you were working as a nurse in the UK until you moved to Wexford and then continued to work in nursing there. On that basis, you meet the Class 2 criteria. Quite how the years since 2016 will be treated, I simply don’t know so I’m not going to guess.
Of course, you cannot really expect the UK authorities to simply take your word for these things, so they will want to see proof that you have social insurance contributions.
Anyone can get a copy of their PRSI record from the Department of Social Protection – either by using the MyWelfare app – which will be the quickest and easiest approach but requires you to register online for a MyGovID – or by writing to the Department of Social Protection, McCarter’s Road, Ardaravan, Buncrana, Co Donegal.
Anyone who lived or worked in the UK for at least three years should check whether they might be able to benefit but the clock is ticking with an April 5th deadline for making contributions. That deadline has already been extended a couple of times so I wouldn’t bet on any further extensions.
You can access the necessary form here or contact a broker who will guide you through the process. Xtrapension in Galway is one that is working in this area.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice
