I am 48 years old. I cared for my younger siblings when my mother died a young woman. Recently, I applied for recognition of this and received a document towards my State pension. So, from age 16 to 21, they recognise that I was a carer of my family of six siblings, two of whom were under 12 at the time.
I have studied and worked, paying PRSI, since the age of 22 until now, almost 27 years.
I plan to retire at age 57. I would hope then I should have 35 years and the five carer’s years to make 40 years for State pension when the time comes.
But I am trying to understand the calculation. Will it be seen as 40 years work over 50 years, aged 16 to 66 ... or will it be seen as 40 years work over 40 years please?
I would like it to have 100 per cent State pension, not 80 per cent, after 40 years working.
Ms E.K.
It is a position no one ever hopes to find themselves – having to take care of your younger brothers and sisters at a time when you were only growing up yourself. So it is only fair that, at your request, the Department of Social Protection has accepted that you are entitled to five years of caring PRSI credits for that time.
It sounds like the caring might have gone on for a good deal longer but there are rules around those homecaring credits – notably that you had to be at least 16 and that the children were under the age of 12. They can apply over the age of 12 but only for older children or adults in need of additional care, generally because of age or illness.
I assume you have got a formal copy of your PRSI record from the Department of Social Protection confirming the five credited years. If not, please make sure that you do.
Those five years of credits alongside your 27 years of paid PRSI during your working life to date mean that, as of now, you have 32 years of PRSI coverage. Given you plan to work until you are 57, another eight-plus years, you will have 40 years of social insurance stamps.
Traditionally, State pension was calculated on the basis on the average number of PRSI stamps paid each year over a working life. So, as you say, you could work 40 years over a period of 50 years and miss out on a full State pension.
More recently, the State has introduced the total contributions approach, under which you get a full State pension once you have 40 years' credits, regardless of over how many years those contributions those PRSI stamps have been paid.
In each case, you need at least 10 years of contributions to qualify at all.
In your case, you will be assessed under the total contributions approach which means that, by the age of 57, you will have your 40 years of social insurance to qualify you for a full State pension.
How can I be sure?
There were two ways that time out of the workforce to care for family were assessed for State pension.
The Homemakers Scheme was the original scheme and it operated by discounting any years spent taking care of family from your working like. So, if the period from your first PRSI payment to retirement was 50 years but you spent five years caring for family, it would simply take those years out of the calculation and work out your PRSI average over 45 years. You could discount up to 20 years in this way.
However, this was only introduced in 1994, by which time you would have been 18 and so you would only have been allowed three years under this calculation – and the department has told you it accepts your five-year caring period.
That means they are using the Homecaring Periods scheme. This was introduced much more recently and operates by granting PRSI credits for up to 20 years of time taken out of the workforce to care for family or others.
Critically, the Homecaring scheme means your State pension eligibility will only be calculated using the total contributions approach, so you have nothing to fear on that account.
What is an issue, obviously, is that you cannot just start drawing down your State pension at 57, even if you choose to retire at that time. You still need to wait until you hit the age of 66 to start drawing down the State pension.
Some people can get a weekly payment – €244 a week this year – to cover the year between the age of 65 and 66 where you are retired and not working that year but, among other things, you must have either 39 PRSI stamps in what is called the “governing contribution year” or an average of 26 stamps in that year and the previous year.
The governing contribution year is the second-last full tax year before the year in which you turn 65, so the year in which you will turn 63.
As you are talking of retiring at 57, you will not qualify, so you will be dependent on any private pension or other income to bridge the gap from your intended retirement at 57 and when you turn 66.
Finally, do remember that the State pension may not be paid automatically. The advice from the department is that you apply six months in advance of the date you intend to start drawing down the pension. This is probably even more important now that there is provision for some people to defer pension drawdown.
You can do so through MyWelfare provided you already have a verified MyGovID account, for which you will need a public service card. Otherwise you can fill out a Form SPC1, which you can download and print off from your computer. Alternatively, you can pick one up from any post office, Intreo office or social welfare branch office.
If using the printed form, you’ll need to return it to:
State Pension (Contributory) Section, Department of Social Protection, College Road, Sligo, F91 T384.
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
