Juggling social insurance across borders to get a pension

Q&A: Dominic Coyle

The United States is one of the countries with which Ireland has a bilateral social insurance agreement with. Photograph: iStock

The United States is one of the countries with which Ireland has a bilateral social insurance agreement with. Photograph: iStock

 

I am an Irish citizen currently residing in the United States. I left Ireland in February 1977. I had worked there from August 1974 until January 1977. I then returned to Ireland in June 2007 and worked there from September 2007 until May 2011 before coming back to the US.

Not sure if this amount of time worked qualifies me for the State pension.

Also, are you familiar with a reciprocal agreement between Ireland and the US regarding Social Security benefits and the Irish State pension for those that worked in both countries?

Mr P.B., United States

The first premise of eligibility for an Irish contributory State pension, for anyone qualifying since 2012, is that you have a minimum of 520 PRSI contributions. And a minimum of 260 of those must be regular contributions made while you were employed here. The balance of 520 can be full-rate voluntary contributions.

I’m not going to get into voluntary contributions here as they don’t apply to your position.

From what I can see, you have a maximum of 315 PRSI contributions lodged for those periods where you worked in Ireland. That would not make you eligible for a State pension here.

Of course, one applies for a pension in the country in which they are resident.

Now, if you were based here, it would be open to you to use social insurance payments made in the United States to help you qualify for a pension here as the United States is one of the countries with which Ireland has a bilateral social insurance agreement with.

That’s a two-way agreement so your contributions over here should also be available to you to use for eligibility purposes in the United States. You’d need to check locally on the precise provisions from the US side as I do not have a copy of their rules on such contributions to hand.

But from the Irish point of view, you would first add all the Irish and US contributions together and then divide it by the number of years you have worked – dating back to the first job you ever held that involved a PRSI payment. That, in many cases, would be a part-time summer or college role.

However, it doesn’t stop there – and this is something I failed to mention last week when I was dealing with this issue. Foreign contributions while they are fully valid for reaching the threshold to allow you receive an Irish State pension, are less helpful in determining the amount of that pension.

To sort out the actual pension of someone resident here but with your work record, you need to multiply the rate of pension you would get if all contributions counted equally by the number of full-rate Irish contributions. You then divide it by the total number of contributions.

Effectively, this means you would get a pro-rata pension, reduced to take account of the fact that many of your social insurance contributions were not made here.

Send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or by email to dcoyle@irishtimes.com. This column is a reader service and is not intended to replace professional advice

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