Ireland has two State Pensions that provide financial assistance to individuals aged 66 and above. They are:

• State Pension (Contributory), formerly known as the Old Age (Contributory) Pension.

• State Pension (Non-Contributory), previously known as the Old Age (Non-Contributory) Pension.

Typically, “State Pension” refers to the State Pension (Contributory) — which depends on your Pay Related Social Insurance (PRSI) contributions.  

We’ll explain the Contributory State Pension in detail, including how it differs from the Non-Contributory State Pension.

What Is the State Pension (Contributory) in Ireland?

The State Pension (Contributory) is a social insurance payment made to people aged 66 and above based on their social insurance records.

To receive this pension, they must have enough Class A, E, F, G, H, N, or S social insurance contributions (full-rate PRSI contributions).

Learn about these PRSI classes and their contribution rates. 

How Does It Differ From the State Pension (Non-Contributory)?

Unlike the PRSI-dependent State Pension (Contributory), the Non-Contributory State Pension is a means-tested payment. 

It’s made to people aged 66 and above who don’t qualify for the Contributory State Pension due to insufficient PRSI contributions. 

To be eligible for the Non-Contributory State Pension, you must pass a means test that assesses your financial resources and fulfils certain age and residential requirements. 

Who Can Qualify for the State Pension (Contributory)?

Let’s look at the eligibility criteria for employed and self-employed people:

A. Eligibility Criteria for Employees 

To qualify for the State Pension (Contributory), an employee must fulfil each of the following conditions: 

1. Paid PRSI Contributions Before a Specific Age

The employee must have started to pay PRSI contributions before they turned 56. The day an employee starts paying PRSI is known as their entry into insurance date.

If you have mixed-rate contributions (which means you've paid PRSI contributions as an employee and as a public/civil servant), the following rules apply: 

• If your first date of PRSI payment (entry into insurance) was before you turned 56 and before 6th April 1991, your official entry into insurance is the date that gives you a larger pension payment. 

• If you started paying full-rate PRSI contributions after 6th April 1991, your entry into insurance is the date of your first full-rate contribution.

2. Amount of PRSI Contributions

The number of full-rate PRSI contributions you require depends on the date you reached pension age (66):

• 6th April 2012 and after - 520 contributions (10 years)

• Between 6th April 2002 and 5th April 2012 - 260 contributions (5 years)

• 5th April 2002 and earlier- 156 contributions (3 years)

Those who reached pension age after 6th April 2012 can have a maximum of 260 voluntary contributions.

3. Total Contributions or Yearly Average

This is one of the trickiest parts of the Contributory State Pension, so hold tight.

A yearly average number of contributions is calculated for everyone who reached pension age before 1st September 2012. 

This average is either calculated under the normal average rule or the alternative average rule.

For anyone who reaches pension age after 1st September 2012, the DSP calculates their maximum pension rate using the average rules mentioned above or the Total Contributions Approach (TCA). 

Here's how many contributions these rules require:

• Alternative average - An average of 48 contributions per year to receive the maximum pension amount (no minimum amount).

• Normal average - A minimum of 10 average contributions per year to receive the minimum amount and 48 to receive the maximum amount.

• TCA - You need a minimum of 2080 contributions (40 years) to receive the maximum State Pension (Contributory) rate.

Homemakers can get an exception for up to 20 years under both the averages scheme and the TCA. People can also use up to 520 credited contributions under the TCA. 

B. Eligibility Criteria for Self-Employed  

To qualify for the State Pension (Contributory), self-employed people must have full-rate contributions paid at Class S. 

While most of the conditions we've mentioned for employees also apply to self-employed people, the entry into insurance rule applies differently for self-employed individuals. 

Ireland’s Department of Social Protection started social insurance PRSI contributions for self-employed people on 6th April 1988.

To assess eligibility for the Contributory State Pension, the DSP will check if the self-employed individual has:

• Contributions Paid On or Before 6th April 1988: For self-employed people who started paying their PRSI contributions before 6th April 1988, the DSP will assess their State Pension eligibility based on their contribution record from that date. They do this if it gives employees better entitlement while calculating their benefits. 

• Contributions Paid After 6th April 1988: If self-employed people began paying Class S PRSI contributions after this date, the DSP determines their entitlement based on the date of their first contribution (the date of entering insurable employment).

What Are the State Pension (Contributory) Payment Rates in Ireland?

The maximum weekly personal rate of State Pension depends on the person’s age:

• For people aged 66 to 79, the rate is €265.30, and

• For people aged 80 and above, the personal rate is €275.30.

People receiving the weekly payment can also receive a pension increase for a qualifying adult or dependent child if they fulfil certain conditions.  

A. Increase for a Qualified Adult (IQA)

Adult-dependent increases usually cover their spouse, civil partner, or cohabitant. 

IQA is a means-tested payment that considers any income their adult dependent gets from employment/self-employment, savings, or investments. 

The DSP will consider only half of the income for those with joint savings accounts with adult dependents while checking IQA eligibility. 

A person who has made 48 or more yearly average contributions can be eligible for an increase for adult dependents, but the payment rate depends on the dependent's age. 

As of July 2023:

• If the adult dependent is under 66, they get an increase at a maximum rate of €176.70.

• If the adult dependent is over 66, they get an increase at a maximum rate of €237.80.

B. Increase for a Qualified Child (IQC)

An increase for qualified child dependents (IQC) is also a means-tested payment.  

A person may not be eligible for an increase for a qualified child dependent if their partner earns over €400 per week. 

On the other hand, if their partners earn between €310 and €400 per week, they're eligible to get a half-rate child benefit, but this only applies to claims made after 6th July 2012.

Employees may also be eligible for other benefits and allowances like a living-alone increase, a household benefits package, or a fuel allowance.

Can Employees Claim the Contributory State Pension if They Have Worked Outside Ireland?

Yes, employees working outside Ireland can claim State Pension (Contributory). 

Employees who have worked in Ireland or one or more EU states can combine their social insurance contributions made in each EU member state with their Irish contributions. 

Ireland has signed bilateral social security agreements with many countries, which allows Irish employees working in countries other than the EU to join the State Pensions scheme. 

Some of these countries include:

• Canada

• The USA

• The UK

• Australia

• New Zealand

• Switzerland

If an employee’s Irish social insurance contributions are insufficient, they may still be eligible for a pro-rata pension (a portion of a full pension) from either Ireland or another country.

Remember: 

Employees should apply for Irish State Pension in the country where they currently reside. 

So if you live in Ireland but have worked in a country having bilateral relations with Ireland, you can apply for a pension through the Department of Employment Affairs and Social Protection.

The Department will initiate a pension claim in that country by contacting the relevant institution on the employee’s behalf.

Similarly, if an employee claims their pension in another country but has made social insurance contributions in Ireland, the same procedure will apply but in reverse.

How to Apply for Ireland’s State Pension (Contributory)?

A person living and working in Ireland should apply for the State Pension (Contributory) 3 months before they turn 66.

People who have worked outside Ireland in any of the countries mentioned above must apply 6 months before they reach the State Pension age. 

To apply for State Pension (Contributory), you must complete the SPC1 application form.

Download the State Pension (Contributory) (SPC1) application form.

You can collect the form from the nearest post office, Intreo Centre, or Social Welfare Branch Office.

People who wish to apply for an adult-dependent increase must fill out the application form for an increase for qualified adults (SPCQA1). 

Download the application form for Increase for Qualified Adult (SPCQA1).

Where to Apply for the State Pension (Contributory)?

All State Pension (Contributory) applications must be submitted via post, as the DSP doesn’t accept online applications. 

Once the application form is complete,  post it to the following address:

Department of Social Protection

College Road

Sligo

F91 T384.

In case of any queries, you can contact the DSP at:

Tel: (071) 915 7100 or 0818 200 400

Email: [email protected]

4 FAQs About the State Pension (Contributory)

Here are some commonly asked questions about State Pension (Contributory).

1. Is the State Pension (Contributory) Taxed?

In Ireland, all pension income, including State, occupational and private pensions under the PAYE (Pay As You Earn) system, is subject to taxation. 

If someone receives an occupational pension and the State pension, they might be required to pay taxes on both.

2. Can Widows or Surviving Civil Partners Get the State Pension (Contributory)?

Widows and surviving partners can claim State Pension (Contributory), aka Surviving Civil Partner’s Contributory Pension. 

The entitlement depends upon the social insurance contributions made by the person eligible for the pension, i.e., the deceased spouse or civil partner. 

This pension is not means-tested and covers the deceased's widows and surviving civil partners, even if they are employed or have other sources of income.

A person may be entitled to this pension if they are not cohabiting with another person and are:

• Widowed or a surviving civil partner.

• Divorced from their late spouse and have not remarried.

• Dissolving their civil partnership with their late civil partner and not entering a new civil partnership or marriage.

3. Can Employees Work After Retirement While Receiving the State Pension (Contributory)?

Individuals aged 65 and above can work full-time after turning 66 and still receive their Irish State Pension.

Even if someone has retired early, they can re-enter the workforce by getting a new job or starting their own business. 

Moreover, a person can receive weekly income from their contributory pensions even if they are enrolled in an occupational pension scheme and receiving an occupational pension payment.

4. What is the State Pension (Transition)?

The State Pension (Transition), also known as the Retirement Pension until 2007, was a payment made to employees from age 65 till they reached the State Pension age of 66. 

To avail of State Pension (Transition), an employee had to be retired from insurable employment. They were automatically transferred to the State Pension (Contributory) when they reached the qualifying age of 66. 

The Irish government abolished this pension scheme on 1st January 2014. 

Boost Your Employees' State Pension by Offering Extra Benefits with Yonder

Offering State Pension (Contributory) to employed and self-employed workers in Ireland was an initiative the Irish government took to ensure citizens are well looked after in retirement. 

As an employer, you can supplement the State Pension by setting up a solid occupational pension scheme with Yonder.

Yonder lets you: 

• Easily set up a workplace pension plan.

• Enrol your staff in award-winning pension schemes within minutes.

• Set matching employer and employee contributions.

Moreover, your employees get complete control over their contributions, allowing them to make changes whenever they want. 

So what are you waiting for? Empower your people with Yonder’s digital pensions!