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Index

1. Description

2. Legislation

3. Administration

4. Qualifying Conditions in Summary

5. Number of Credits awarded

6. Qualifying Conditions in Detail

(a) Social Insurance Benefit or Allowance

(b) Restriction on the granting of Credited Contributions

(c) Recognised Employment Scheme

(d) Approved Education course

(e) Training Credits

(f) Miscellaneous credit provisions

  1. Pre-entry Credits
  2. Student Credits
  3. Volunteer Development Worker Credits
  4. Change of Status Credits
  5. Social Welfare Act Credits
  6. Army Reservist Credits

7. Signing For Credits

8. Credits Following Class B, C Or D Or Mixed Insurance


Description

1. Credited contributions (credits) are social insurance contributions which are awarded to an insured person without a Pay Related Social Insurance (PRSI) payment being received from the insured person.

Credits are awarded in circumstances such as unemployment and illness, and their purpose is to help protect the social insurance entitlements of insured persons during periods when they may not be in a position to pay contributions.

In order to qualify for credits, a person must first have entered insurable employment - he or she must have paid at least one PRSI contribution as an employed contributor.

Credits may enable insured workers to qualify for various social insurance benefits. While the contribution conditions applying to the various insurance benefit schemes can vary,a claimant must, in general, have

  1. Paid a minimum number of weekly contributions (ranging from 52 for short-term benefits to 260 in the case of pensions),
    and
  2. Have a certain number of contributions or credits over a specified period; in the case of short-term benefits this is the relevant tax year, while in the case of long-term benefits (e.g. pensions) this is on the basis of the yearly average number of contributions and/or credits over the person's working life.

Credits cannot be used to satisfy condition (a). Thus, credits are only of value to a person who satisfies this "paid contribution" test.

Legislation

2. The legislative provisions governing the award of credits is contained in Chapter 6 (section 33) of the Social Welfare Consolidation Act 2005. The regulations governing the award of credited contributions are set out in S.I. No. 312 of 1996.

Administration

3. The insurance records (including credits awarded) of all insured workers are maintained in the Client Eligibility Services, Department of Social Protection, McCarter's Road, Ardarvan, Buncrana, Co. Donegal. When an insured worker makes a claim for an insurance benefit, the application is dealt with by the relevant scheme area in the Department, who have access to the insurance records maintained by the General Records Section.

Qualifying Conditions In Summary

4. Credits are awarded automatically to everyone when they first start work. Subsequently, insured workers may be awarded credits if they claim a social welfare payment because they are out of work, or they are ill or incapacitated, or if they are engaged in certain training or educational courses.

To be entitled to credits, a person must have worked previously and have paid PRSI contributions. If at any stage in their working life, a person has no PRSI paid or credited contributions for two full tax years, they cannot be awarded credits again until they return to work and pay PRSI contributions for at least 26 weeks. The value of a credit is generally the value of the last paid contribution.

The range of circumstances in which credits may be awarded are set out in greater detail below.

Number Of Credits Awarded

5. Normally one credit is awarded for each week of entitlement except in the case of proved unemployment or incapacity for work, when a daily method of calculating the credits is used. In these cases the number of credits is calculated as one sixth of the total number of days of proved unemployment or incapacity in a contribution year. In calculating the number of contributions to be credited, a fraction of a whole number is rounded up to the next whole number. The maximum number of credits which may be awarded in any contribution year is 52.

Qualifying Conditions In Detail

6. There are a large number of circumstances under which an insured person may be entitled to credits:

(a) Social Insurance Benefit or Allowance

Unless restrictions apply, credits are awarded for periods when an insured person is receiving any of the following benefits or Allowances:-

  1. Illness Benefit
  2. Jobseeker's Benefit or Allowance
  3. Occupational Injury
  4. Maternity Benefit
  5. State Pension (Transition)
  6. Invalidity Pension
  7. Prescribed Relative Allowance
  8. Carer's Allowance
  9. Carer's Benefit
  10. One-Parent Family Payment*
  11. Pre-Retirement Allowance
  12. Health and Safety Benefit
  13. Adoptive benefit
  14. Disability Allowance

* An insured person is entitled to an employment contribution credit in respect of any week in which s/he is in receipt of One Parent Family Payment provided that immediately prior to such claim s/he was entitled to credits and in receipt of Illness Benefit, Occupational Injury, Jobseeker's Benefit or Allowance, Carer's Benefit or Allowance, State Pension (Transition), Maternity Benefit, Health and Safety Benefit, Adoptive Benefit, Disability Allowance, Invalidity Pension and Pre Retirement Allowance.

(b) Restriction on the granting of Credited Contributions

In some cases credits are not awarded even though the person may be receiving a social insurance Benefit or Allowance. This arises from the restriction contained in the Statutory provisions which state that where there is a gap of two complete consecutive years in the person's employment contribution or credited contribution record, then no credits may be awarded. Appropriate social insurance contributions paid in another EU country can count for the purpose of bridging this gap of contributions.

This restriction is lifted when 26 employment contributions have been paid and the person may subsequently again be awarded credits. However, contributions at Class S (self-employment), Classes K, M or J paid during the two year period, do not count in terms of lifting this restriction.

It should be noted also that if the 26 contributions are paid at Class B, C or D, then the credits awarded following this period of employment are reckonable for widow's pension or guardian's payment or deserted wife's benefit only.

(c) Recognised Employment Scheme

Provided that at some stage the person has been an employed contributor, credits are awarded to participants working on recognised employment schemes. Such schemes, include for instance, the Part-Time Job Incentive Scheme, and the Back to Work Allowance Schemes. It should be noted however that where a person engages in self-employment under the Back to Work Allowance Scheme, there may be a liability to pay Class S contributions.

Credits were awarded to participants on the Community Employment schemes up to April, 1996. Since 6 April, 1996 any person commencing a Community Employment scheme is required to pay Class A contributions.

(d) Approved Education course

When participating in an approved course of education an insured person may be granted a credit for each week or part of a week during which s/he is participating in-

  1. a scheme administered by the Minister and known as the Back-to-Education Allowance Scheme
    or
  2. a scheme administered by the Minister for Education and known as the Vocational Training Opportunities Scheme (VTOS)
  3. any other course of education approved by the Minister for Social Protection.

Credits are awarded to an insured person participating in an employment scheme or approved education or training course, provided that an employment contribution, other than a contribution reckonable for occupational injuries only, is not payable by the person or the participant has received a credit in respect of duly notified incapacity for work. Where the last contribution paid by a participant in a recognised employment scheme or approved education or training course is a voluntary contribution or other specified employment contribution the value of the credit is taken as that of the last paid contribution.

(e) Training Credits

These credits are made in respect of periods of recognised training at an approved course of training. The following training organisations are recognised for this purpose:-

  1. An Foras Aiseanna Saothair (FAS)
  2. CERT Limited
  3. Teagasc
  4. Bord Iascaigh Mhara (BIM)
  5. any other course of education approved by the Minister of Social Protection
(f) Miscellaneous credit provisions:

(i) Pre-entry Credits

An insured person who takes up employment for the first time is awarded pre-entry credits from the beginning of the relevant contribution year (6th April) to the date of entry into social insurance as an employed contributor. The insured person is also entitled to credits for the two previous contribution years before entry into insurable employment.

(ii) Student Credits

Where a student has completed a course of full-time education and re-enters insurable employment as an employed contributor in respect of which employment contributions reckonable for State Pension (Contributory) are payable then entitlement to student credits may exist. Student Credits are reckonable for short term benefits (e.g. Illness Benefit) only.

In order to be awarded the credits the student must submit:-

  1. A statement from the college showing that the course was full-time and the date of commencement and cessation of course
    and
  2. Verification of date of re-entry into full-time insurable employment as an employed contributor.

Student credits are awarded from the date of the beginning of the relevant contribution year (6th April) up to the date the insured person re-entered insurance as an employed contributor. Credits are also awarded in respect of the two previous contribution years before re-entry into insurable employment.

Where student credits overlap with other credits such as pre-entry credits only one type of credit may be awarded in respect of any particular week. Student credits can only be awarded once. The award of student credits is made only to students who commence full-time education before reaching the age of 23 years.

A course of full-time education means a course of full-time instruction by day at a university, college, school or other educational establishment.

(iii) Volunteer Development Worker Credits

There is provision for the awarding of credits to an insured person who is or was a volunteer development worker who worked outside Ireland, in a developing country, or engaged in preparatory training in the state prior to taking up employment in a developing country. A Volunteer Development Worker must be resident in the Republic of Ireland immediately prior to his/her assignment to the developing country to qualify for credits. The credits awarded may not exceed a total period of five years.

The Agency for Personal Services Overseas (APSO) is regarded as the employer of a volunteer development worker who secured employment through APSO or other recognised agency.

A Volunteer Development Worker whose employment was insurable at a modified rate of contribution (e.g. Class B) immediately prior to taking up employment in a developing country and who resumes employment which is also insurable at the modified rate after termination of his/her employment as a volunteer development worker will not be entitled to payment of Illness Benefit, Treatment Benefit (see below), Maternity Allowance or Invalidity Pension on the basis of the credits awarded in respect of employment as a volunteer development worker.

There is a special concession in relation to Treatment Benefit entitlements for volunteer development workers.

(iv) Change of Status Credits

When an insured person, following a period during which s/he was insured at a modified rate of contribution (e.g. Class B), commences employment which is insurable for State Pension (Contributory) (SPC) purposes, then credits may be awarded which are reckonable for State Pension (Transition), SPC and Death Grant purposes. The credits are awarded for the period between the beginning of the contribution year last preceding that in which s/he commenced such employment and the date of commencement of such employment. These credited contributions may be awarded on one occasion only.

(v) Social Welfare Act Credits

The insurable limit on earnings was raised on a number of occasions (29/12/1958, 6/9/1965 and 3/5/1971) before being finally abolished on 1 April 1974. Regulations provide for the crediting of employment contributions to persons whose employment again became compulsorily insurable on the above dates. The contributions are granted for a period sufficient on the said dates to satisfy the second contribution condition for Illness benefit, Jobseeker's benefit and Maternity Allowance. These credits are also reckonable for pension purposes depending on the application of the various Social Welfare Acts.

The general provision that a person must have a paid or credited contribution in the last two complete contribution year do not apply to Social Welfare Act credits.

(vi) Army Reservist Credits

There is provision for credits to be awarded to Army Reservists who are called out in aid of the Civil Power for service subsequent to 11 August 1969. There is provision for treating the contributions as paid on the due date where they are necessary to establish entitlement under the Social Welfare Act.

Signing For Credits

7. Under certain circumstances a person may be awarded credits without receiving a Benefit or Allowance payment. This may apply, for example, in the case of a person who has exhausted entitlement to Jobseeker's Benefit but who does not qualify for Jobseeker's Allowance due to their means. In this case, the person may be entitled to 'sign' for credits to protect their other social insurance entitlements. Signing for credits usually involves attending a Local DSFA Office at a specified number of times per year.

Credits may also be awarded to workers involved in an official trade dispute.

In order to be entitled to Unemployment Credits, a person must be available for full-time employment, capable of work and must also be genuinely seeking work. The additional requirement to be genuinely seeking work for the award of credits while unemployed is effective from 27 August 2003.

Credits Following Class B, C Or D Or Mixed Insurance

8. Civil and Public Servants (who have been insured at the PRSI Class B, C or D rates of contribution) aged under 66 and who retire on the grounds of ill-health are entitled to credits for each week they are certified unfit to work. These credits are awarded on receipt of medical certification of illness and inability to work to cover the period in question. Medical Certificates should be sent in once a year and should be submitted within 8 months of the completion of the contribution year for which the credits are being sought.

An information leaflet together with an application form, "Giving up work because of ill health" is available on request, SW 20 / CR 35. The scheme is administered by Client Eligibility Services, Department of Social Protection, McCarter�s Road, Ardarvan, Buncrana, Co Donegal.

There is a restriction on the value of credits awarded to an insured person whose last employment was insurable at the modified rate of Class B,C or D rate of contribution i.e. the credits awarded are reckonable for widow's or orphan's pension or deserted wife's benefit only. However, this restriction does not apply where there is title to Jobseeker's Benefit, Illness Benefit or Maternity Benefit whilst payments of these benefits are being made. In these cases the credits awarded are at the full rate during payment.

Where the insured person has mixed Classes of contributions (e.g. Classes A and B) then the the Class of the last contribution paid will determine the value of credit to be awarded.

There is no restriction on the value of credits awarded to an insured person who, following a period of insurance at Class B, C or D rate, takes up employment which is insurable at Class A. The credits are reckonable for all benefits irrespective of the duration of the Class A employment.


Last modified:05/07/2011
 

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