Pro-rata pensions

Pro-rata pensions were introduced because some people were excluded from the social insurance system at particular times.

You may get a pro-rata pension if you have a mixed insurance record. This can happen when you spend:

• Part of your working life in the public service (where you pay modified-rate social insurance contributions) and
• Part of your working life in the private sector (where you pay full-rate social insurance contributions).

Exceptions to pro-rata pensions

If you had a career in both the public and private sectors, you may not have a mixed insurance record. This is because people with incomes above certain amounts didn’t have to pay PRSI before 1 April 1974.

Can I get a State Pension (Contributory)?

If you have mixed insurance, you may still have enough full-rate contributions to get a State Pension (Contributory).

However, it depends on your exact circumstances. It is possible that one person will qualify but another person, who has more contributions, will not qualify.

If you reach pension age on or after 6 April 2012 and you have a mixed insurance record, you can get a pro-rata pension if you meet the following conditions:

• You have a minimum of 520 PRSI contributions (full-rate and modified-rate)
• You have at least 260 full-rate paid contributions since your entry into insurance
• Adding together a mixture of full-rate contributions and modified-rate contributions, gives you a yearly average of at least 10 from the time you first entered insurance. This yearly average condition does not apply if the TCA (or Aggregated Contributions Method) is used
• You do not qualify for a pension under EU regulations or under reciprocal arrangements with other countries (or you only qualify for a pension at a lower rate than this pro-rata pension would give you).

If you meet all these conditions, you may qualify for a pension proportionate to the number of contributions you paid at the full rate. For example, if you worked for 40 years and 10 of those years were in the private sector, you would get one-quarter of the full pension.

Step 1: Calculate your notional pension

The notional pension is the rate of State Pension (Contributory) which would be payable if your social insurance contributions, both full and modified, were treated as full contributions.

Add your full rate and modified rate contributions together. Divide the total number of contributions by the total number of years since you first entered insurance to the end of the tax year before you reach pension age.

You need an average of at least 10 contributions a year to continue to Step 2.

You can find your notional pension rate based on your yearly average number of contributions on gov.ie.

Step 2: Use this formula to calculate your pro rata pension rate

(A x B)/C

• A = the notional rate of pension (see Step 1 above to calculate the notional rate of pension)
• B = the number of full contributions
• C = the total number of contributions (full and modified)

Increases in your pension

Any increases in your State Pension (Contributory) for a qualified adult dependant, and pensioners over 80, are calculated in the same way as the personal rate of pension.

If you have worked in Ireland and in one or more EU countries, your social insurance contributions from each EU state will be added to your Irish PRSI contributions. This helps you to qualify for a social welfare payment, such as a State pension.

Find out more in our page about combining your social insurance contributions.

Increases in your pension

You can only get an increase for a qualified child (IQC) from one country. If you get an IQA from Ireland, it is paid in full.

If you spent time working outside the EU, you may be able to combine your social insurance contributions from abroad with your contributions paid in Ireland.

Bilateral social security agreements and pensions

Ireland has bilateral social security agreements with:

• Canada
• The United States
• Australia
• New Zealand
• Austria
• Japan
• Republic of Korea
• Quebec (which has a separate system from the rest of Canada).

In general, these agreements let you combine your social insurance paid in Ireland with the other country, to help you qualify for a State pension.

You can read about how your social insurance contributions under bilateral social security agreements are calculated.

There are other pro-rata pensions that no longer apply to many people, because most people who would qualify are now over 66.

Pro-rata pension for self-employed people

Self-employed people have had to pay social insurance since 1988. Before that, some self-employed people voluntarily paid insurance.

Some self-employed people were already over the minimum age when they first started to pay contributions in 1988. In April 1999, a special pro-rata pension was introduced for them.

Only people aged 56 or over on 6 April 1988 (born on or before 6 April 1932) qualify for this pension.

Pro-rata pensions for people with pre-1953 contributions

There is a special pro-rata pension for people with pre-1953 contributions. This pro-rata pension was introduced in May 2000. You may qualify if you have at least 520 full contributions, some of which must have been paid before 1953. Every 2 contributions paid before 1953 count as 3.

If you meet these conditions, you may get a pro-rata pension of half the normal maximum rate. You can also get increases for a qualified adult and child at half-rate.

The increase for pensioners over 80 is paid in full.

Pro-rata pension for intermittent insurance

Since January 2013, you can no longer apply to the Pro-rata pension for intermittent insurance pension.

Pro-rata pensions were first arranged for people who had been in and out of insurance, because of the operation of the income limit on contributions.

Before 1974, non-manual workers only had to pay social insurance contributions if their income was below a certain level. From 1 April 1974, there has been no income limit.

Many people paid social insurance for a period and then stopped paying when their income went above the limit. They then came back into the insurance system when the income limit was abolished in April 1974.

They would not meet the usual average requirement because they stopped paying for a while. On 14 October 1988, arrangements were made for them to qualify for a pro-rata pension.

How their pension was calculated

Their average is measured in the usual way, and if that average is 10 or more, they get a pension in the normal way. However, if it is between 5 and 9, they may get a special partial pension which is one quarter of the maximum pension.

Only people who had a broken insurance record and who re-entered insurance in 1974 because of the removal of the income limit, could apply for this pro-rata pension. If you re-entered insurance in that year for any other reason (for example, because you had previously been self-employed or out of the country), you do not meet these specific terms and you would not be eligible for this pro-rata pension.

If you qualified for this pro-rata pension, you could also get the appropriate Increase for Qualified Adult for a dependent spouse, civil partner or cohabitant, and an Increase for a Qualified Child.

This pro-rata pension is for State Pension (Contributory) and Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension only. Because it is easier to qualify for a Widow’s, Widower’s or Surviving Civil Partner’s Contributory Pension, the numbers who need the pro-rata pensions are very small.