You were writing recently about PRSI contributions and the State pension. Are you aware that more than women are affected by these measures? Anybody who paid a stamp in this country and then left to work abroad for a number of years is in the same boat.
I had a summer job after college in 1974 and then left the country for nine years, returning in 1984. As a result of that absence, when my pension calculation is done the clock will have start ticking in 1974: the divisor for my payment calculation will be 45 rather than 36.
I could have stayed in Ireland on the dole and drawn from the government coffers for those nine years but I didn’t; I left at a time of 20 per cent-plus unemployment, was no longer a burden to the State, and made my living elsewhere.
Yet now I will suffer a pension deficit because of this immoral, punishing and deeply unfair legislation. Had I not had that summer job, I would not suffer this penalty.
Mr B.K., email
Answer: It is very much not simply a problem for women. Women have been the focus to some degree because so many of them were forced out of their jobs by the marriage bar that operated here between 1932 and 1973.
Although this was first and foremost an issue in the public service – where people would not have qualified for the State pension anyway, unless they joined after 1994 – many private sector companies observed the bar, notably the banks and the professions.
The treatment of women at that time has been a running sore and one that has been ignored by successive governments of all political hues.
But, as you say, the marriage bar is just one factor in people not receiving a full pension. Especially for those currently in the workforce, the bigger issue is gaps in one’s employment record.
So if, like you, a person has a holiday or part-time job on which they pay PRSI contributions and then stops working for any reason – college, leaving the country, whatever – they run the risk of receiving a lower State pension. This, as you say, is because the Irish “stamps” are spread over a longer period – for part of which you were not working here in Ireland.
As it happens, it was also a particular issue for women who left work to have a family. However, from 1994, provision was finally made to allow them discount any year – up to a maximum of 20 years – that they did not pay PRSI contributions or stamps because they were raising a family or taking care of a dependent relative. So if they started work at 18 and later took 20 years out to raise a family, their working lifetime would be deemed to be just 28 years, not 48 as it would for anyone else.
That arrangement – the Homemaker’s Scheme – was not confined to women by the way. Men could avail of it too. However, the reality is that in the intervening years, it has predominantly been a scheme used by women.
Anyway, before I stray too far from your question, there is some possible relief for you.
When you – or more importantly the Department of Social and Family Affairs – sits down to calculate your state contributory pension entitlement, they include not just those contributions made in Ireland before you left and since your return but, potentially, also contributions you made in the country to which you moved to find work.
Under EU rules, any social insurance contributions made in any of the 27 other EU countries is taken into account in assessing eligibility to the State pension and certain other benefits.
Payments made in other European Economic Area (EEA) countries – Switzerland, Norway, Iceland and Liechtenstein – are also included.
In addition, under a series of bilateral agreements on social insurance, stamps paid in the United States, Canada (and , separately, the province of Quebec), Australia, New Zealand, Japan, South Korea and the Channel Islands and Isle of Man can also be used to maximise your benefit.
Apart from being useful in relation to the State pension, social insurance contributions in other EU/EEA states are relevant in determining eligibility for illness benefit, maternity benefit, invalidity pension, jobseeker’s benefit, treatment benefit, carer’s benefit, contributory guardian’s payment and the widow/widower/surviving civil partner contributory pension.
In the case of three of those – the jobseeker’s benefit, maternity benefit and the illness benefit – the last PRSI contribution you make before making a claim to the Irish authorities must be in Ireland.
Under the bilaterals, the other benefits covered are: the widow/widower/surviving civil partner’s contributory pension, the guardian’s contributory and the invalidity pension.
So, if those nine missing years of yours were in any of those countries, you should be able to use social insurance paid there to bring you up towards a full pension in Ireland.
If you were unlucky enough to have moved elsewhere for work back then, then you still have a problem and certainly are actively losing out because of your enterprise in taking a holiday job early in life. With the befit of hindsight, it clearly hasn’t paid off for you.
Send your queries to Dominic Coyle, Ta, 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
