Voluntary Pay Related Social Insurance (PRSI) Contributions


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What are Voluntary Contributions?

Voluntary Contributions are Pay Related Social Insurance (PRSI) contributions you can opt to pay if you are between the age of 16 and 66 and are no longer covered by compulsory PRSI by way of insurable employment, self-employment or credited contributions.

 

Payment of Voluntary Contributions can help maintain or improve your contributory pension entitlements. They do not provide cover for any short term benefits such as Jobseekers, Illness, Maternity or Treatment Benefit. 

What are the qualifying conditions to become a voluntary contributor?

To become a voluntary contributor you must:

  • have paid at least 520 weeks PRSI in either employment or self-employment
    and
  • apply within 12 months of the end of the contribution year(see note below) during which you last paid compulsory insurance or you were last awarded a credited contribution
    and
  • agree to pay voluntary contributions from the start of the contribution week that follows the week in which you leave compulsory insurance.

The amount of contributions required to become a voluntary contributor on or after 6 April 2014 are as follows:

  • you must have previously paid 468 weeks PRSI if becoming a voluntary contributor  on or after 6 April 2014
  • you must have previously paid 520 weeks PRSI if becoming a voluntary contributor on or after 6 April 2015.

  If you pay contributions at Class J for Occupational Injuries Benefits you cannot use them to satisfy these conditions. However, you may pay PRSI at Class J and voluntary contributions at the same time.

Note: Contribution year

The contribution year is the same as the income tax year so it runs from January to December.

Under EU legislation it is not possible for a person to be subject to the social insurance systems of two or more member states at the same time. This means that you cannot pay Voluntary Contributions in Ireland at the same time as you are in insurable employment, self-employment, receiving credited contributions or paying Voluntary Contributions in another EU member state.

 

 

What rate of contribution do I pay?

The rate of Voluntary Contributions payable is always determined by the last rate of PRSI contribution paid by a person. There are three different rates of voluntary contributions.

 

High Rate:   This rate is payable by you if the last PRSI contribution paid by you is at Class A, E or H. The amount payable in each contribution year is a percentage rate of your reckonable income in the preceding contribution year. This percentage rate is currently 6.6%. The minimum annual payment is €500.00. 
 

Low Rate:  This rate is payable by you if the last PRSI contribution paid by you is at Class B, C or D. The amount payable in each contribution year is a percentage rate of your reckonable income in the preceding contribution year. This percentage rate is currently 2.6%. The minimum annual payment is €250.00. 
 

Special Rate: This rate is payable by you if the last PRSI contribution paid by you is Class S – self-employed. The amount payable is currently €500.00 per year.

What benefits do the Voluntary Contributions cover?

The benefits of each Voluntary Contribution rate are as follows:

 

High Rate Voluntary Contributions provide cover for:

Low Rate Voluntary Contributions provide cover for:

 

Please note that Low Rate Voluntary Contributions are not reckonable contributions for State Pension Contributory 

 

Special Rate Voluntary Contributions provide cover for:

How do I become a voluntary contributor?

To become a voluntary contributor, you must complete application form   VC 1 and return it to the address provided. The Voluntary Contribution Section will process the application and advise you if you have qualified to become a voluntary contributor under the voluntary contributions scheme.

 

How do I pay Voluntary Contributions?

If your application is accepted you will be advised of the amount due and where to make your payment to. You should not make any payment until your application has been accepted and a request for payment has been issued to you. Should you remain on the voluntary contributions scheme you will receive notification on an annual basis of further amounts to be paid as they fall due.

You can pay your voluntary contributions by cheque, banker's draft or Standing Order.

 

When do I stop paying Voluntary Contributions?

Should you resume insurable employment, self-employment or become eligible to receive credited contributions you are no longer qualified to be a voluntary contributor and you should not pay any more voluntary contributions. This applies in Ireland and any other EU member state.

However, even if you do not retire at age 65, you stop paying Voluntary Contributions once you reach age 66.

If you meet the PRSI conditions for a Widow's or Widower's Contributory Pension at age 66, you will remain covered for these payments.

Further information regarding Voluntary Contributions is available from

Voluntary Contributions Section
Department of Social and Family Affairs
Cork Road
Waterford.

Telephone: 1890 690 690

Homemaker's Scheme

If you are taking time off work to care for children (under age 12) or an incapacitated adult or child aged 12 or over, the Homemaker's Scheme may be a better option. Under this scheme, we may disregard years spent caring when we work out your entitlement to  State Pension (Contributory).

For further information please contact:

Homemaker's Scheme Section

Department of Social Protection

McCarter's Road

Ardarvan

Buncrana

Donegal

Ireland

 

Telephobe (01) 471 5898

Locall:1890 690 690

Points to note

Voluntary Contributions do not cover the Health Levy for which you may be liable. This contribution is paid directly to Revenue.

If you have any questions about health services, contact your local Health Service Executive office.

Information regarding entitlement to and payment of State Pensions is available from:

The Pensions homepage

or

Pension Section
Social Welfare Services Office
College Road
Sligo

Telephone:
Sligo LoCall 1890 500 000
Dublin (01) 704 3000

Overseas callers 00 353 71 91 93313.

 

 

 

 

Last modified:27/02/2014
 

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