This is a question that we get asked a lot by our clients and especially as clients come closer to retirement. The criteria for the State pension has changed over the last number of years and the table below shows the current position.

When is the benefit payable?

In order to qualify for the State Pension, you must have:

• Started paying PRSI before age 56
• Paid at least 520 weekly contributions of which 260 can be voluntary (* see below)
• An annual average number of 48 weekly contributions paid or credited for each year from 1979/1980
• Paid the appropriate type of contributions (Class A or S)

* Where someone has ceased to be covered by the compulsory PRSI system, eg: on becoming self employed, they can opt to continue paying voluntary PRSI (provided they have paid a certain number of PRSI contributions in the past). This means that someone can  claim the State Pension using these contributions where they couldn’t have otherwise or gain an entitlement to a higher pension.

How much is the State Pension?

Important tip for Directors and Self Employed - Employee/Your Spouse

In order to make sure your spouse is entitled to a State pension, if your spouse is not working, it would make sense for you to employ him or her. This would be especially important if your spouse does not have sufficient PRSI contributions to entitle them to a State Pension.

If your spouse does not have sufficient PRSI contributions, then they must be means tested before they can qualify for what’s called the Qualifying Adult Allowance or additional state pension. I can explain how this is assessed if anyone would like more information.

By employing your spouse you are guaranteeing that they will receive a State pension.

If you have any questions on any of this, please contact Colm Kelly at (01) 8700370 as it is very important that you get a good understanding of the State Pension also how and when it is paid.