When you leave the PRSI system you may loose your entitlement to receive the state old age pension on retirement. However it is possible to retain this benefit but there are a number of criteria you must meet to ensure you will get the old age pension on retirement.
What are Voluntary Social Security Contributions?
Voluntary contributions allow you to remain insured once you leave the compulsory PRSI system. Voluntary Contributions are not compulsory but you may choose to pay them, provided you meet certain conditions. Voluntary contributions cover long-term benefits such as pensions – so the year for which you pay a voluntary contribution will count as a qualifying year for pension purposes. However, the voluntary contributions do not cover short-term benefits such as illness, unemployment, maternity and treatment benefits.
For €500 per annum for people who were previously self-employed you will keep your entitlement to old age pension.
How do I become a Voluntary Contributor?
To become a voluntary contributor there are a number of criteria you must satisfy. You must:
What rate of contribution do I pay?
The rate you pay is based on the rate of the last PRSI contribution paid or credited to you. If you last paid insurance at Class A then you pay 6.6% of your reckonable income (subject to the income ceiling and a minimum amount) in the previous tax year. If you last paid Class S then you pay a flat rate of €500 per annum.
Contact Imelda Prendergast, Director, OSK.
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