Does my wife fall short on access to new, improved pension?

Q&A: Dominic Coyle

For all the improvements that the Total Contributions Approach promises, there is still the first step threshold of 520 paid contributions over a working life to be reached. Photograph: Bryan O’Brien

For all the improvements that the Total Contributions Approach promises, there is still the first step threshold of 520 paid contributions over a working life to be reached. Photograph: Bryan O’Brien

 

My wife hopes to transfer to a contributory State pension under the review of current pensions as part of the move to the new method of calculating State pensions. This would give her the option to reside in the UK, where the rest of her immediate family live and retain payments from the Irish pension service.

In order to establish if this will be possible, we need to source the following information:

1. Will the review cover both contributory and non-contributory pensions?;

2. My wife has 34 years of homecaring from birth of oldest son until youngest son reached 18 years (1976-2010). Up to 20years will be claimable.Will this convert to 20 years contributions/credits or is it a disregard?;

3. My wife claimed unmarried mother’s allowance for part of that time. No credits have been allowed for this period. As most social welfare benefits at that time attracted credits would this be an oversight?

My wife had close to 520 paid contributions but not quite which is why she did not qualify for the contributory pension originally.

Mr BO’N, email

The review you refer to is a lookback project for people who have retired since April 2012 to see if they would fare better under the proposed new Total Contributions Approach to calculating the amount of pension they might receive.

Unfortunately, it appears your wife will not be able to make the transition from non-contributory to contributory pension under this process. This is notwithstanding the extensive homecarer credits she might otherwise be eligible for.

For all the improvements that the Total Contributions Approach promises for many people, there is still the first step threshold of 520 paid contributions over a working life to be reached.

Credited contributions – even if some were inadvertently or otherwise withheld – are irrelevant until this hurdle is crossed. Only then does the new homecaring credit of up to 20 years’ credited contributions for time spent out of the workforce rearing/caring for family come into the reckoning.

Over threshold

Your wife had close to the 520 paid contributions over her working life but was not quite over that threshold. So, unless she retired before April 2012 when the minimum threshold was 260, she will not qualify for consideration under the new scheme as currently proposed by the Government. April 2012 was when the threshold was increased to 520.

In short, if you are on a non-contributory scheme, you won’t come under the review.

It is worth keeping an eye on this as these things have a habit of being amended before they finally pass into law. It could be that the 520 threshold is reduced though there is no current intention to do so.

It’s a pity she was not aware of the impact of her shortfall slightly earlier, as, before April 5th, 2015, it would have been open to her to pay voluntary contributions which might well have brought her above the 520 threshold. That option is no longer available after April 2015 unless you already have the minimum 520 paid contributions, which is no good to you, or her.

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

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