Publication
Operational Guidelines: PRSI - Credited Social Insurance Contributions
From Department of Social Protection
Published on
Last updated on
From Department of Social Protection
Published on
Last updated on
Credited contributions (credits) are social insurance contributions designed to protect the social insurance entitlement record of insured workers who are not in a position to make PRSI contributions.
Credits are awarded in circumstances such as unemployment or 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 at Class A, B, C, D, E, H or P.
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:
and
Credits cannot be used to satisfy condition (a). Thus, credits are only of value to a person who satisfies this "paid contribution" test.
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.
3. The insurance records (including credits awarded) of all insured workers are maintained in Client Eligibility Services at:
When an insured worker makes a claim for an insurance benefit, the application is dealt with by the relevant scheme area in the department, which has access to the insurance records maintained by Client Eligibility Services.
When a person starts work for the first time, credits are awarded for a period prior to their first PRSI contribution (see Pre-entry Credits). 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 these credits, a person must have worked previously and have paid at least one PRSI contribution. Normally, 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.
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.
There are a large number of circumstances under which an insured person may be entitled to credits:
Unless restrictions apply, credits may be awarded for periods when an insured person is receiving any of the following benefits or Allowances:
[1] The State Pension (transition) will no longer be paid where a person reaches 65 on or after 1 January 2014.
[2] An insured person may qualify for 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.
If, at any stage since starting work, a person has no PRSI contributions paid or credited for 2 full tax years in a row, that person cannot get credits until he/she returns to work and pays PRSI contributions for 26 weeks. Contributions paid at Classes J, K, M or S cannot be used to satisfy this condition. However, appropriate social insurance contributions paid in another EU country may count for the purpose of bridging this gap in contributions. Periods spent as a homemaker prior to claiming Carer’s Allowance (CA) can also be used to bridge a 2 year gap in a record for the award of CA credits and subsequent unemployment/illness credits.
Self-employed
If a self-employed person has only ever paid Class S PRSI contributions then he or she is not entitled to credits. If the person can no longer pay Class S PRSI due to illness, unemployment or if income from self-employment falls below €5,000, he or she does not qualify for credits.
If this person wishes to continue to contribute towards state pensions he or she may opt to pay voluntary contributions. It should be noted that voluntary contributions do not cover short term benefits such as Illness, Jobseekers, Maternity, Occupational Injuries, Dental and Optical Treatment.
A person who engages in self-employment under the Short Term Enterprise Allowance Scheme or the Back to Work Enterprise Allowance Scheme is liable to pay Class S contributions if they earn €5,000 or more from self-employment. If income from self-employment is less than €5,000 and the person wishes to continue to contribute towards a State Pension he or she may opt to pay voluntary contributions.
However, if a self-employed person previously has paid PRSI class A, B, C, D, E, H or P and has these paid contributions or credited contributions in either of the last two tax years (and the person can no longer pay Class S PRSI because of illness, unemployment, or if income from self-employment below €5,000) then he or she is entitled to credits (in the same way as an other employed contributor).
This person is only entitled to unemployment credits if their last paid employment contribution is at A, B, C, D, E, H or P.
A self-employed person on Maternity Leave or Adoptive Leave is awarded credits for the duration of that leave if the person has paid Class A, E or H in either of the previous two tax years.
Provided they satisfy the qualifying conditions, credits are awarded to participants working on recognised employment schemes. Such schemes, include for instance, JobBridge , the Work Placement Programme and also the Part-Time Job Incentive Scheme (for those paying Class J PRSI).
When participating in an approved course of education (provided the person qualifies for credits at the commencement of the course of study) an insured person may be granted a credit for each week or part of a week during which s/he is participating in:
or
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.
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:
Under the Homemakers Scheme, which was introduced on 6th April 1994, a person who gives up work to take care of a child under age 12 or an incapacitated person over age 12 can be classified as a homemaker. Complete years spent out of the workforce looking after a child or an incapacitated person are disregarded when working out entitlement to a State Pension (Contributory). However, a person may get credits for the tax year he or she becomes a homemaker and the tax year he or she stops being a homemaker if the period spent as a homemaker is not a complete year. These credits are reckoned only for the purposes of State Pension (contributory).
Pre-entry Credits
Pre-entry credits are awarded to a client when they pay their first PRSI contribution (excluding Class B, C, D, J and S), for the year they enter insurance and for the previous two contribution years.
Student Credits
Where an insured person has completed a course of full-time education and re-enters insurable employment an entitlement to student credits may exist. Student Credits are reckonable for short term benefits (for example, Illness Benefit) only.
The award of student credits is made only to students who commence full-time education before reaching the age of 23 years.
In order to be awarded the credits the student must submit:
and
Student credits are awarded from the date of the beginning of the relevant tax year up to the date the insured person re-entered insurance as an employed contributor. Credits are also awarded in respect of the two previous tax 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.
A course of full-time education means a course of full-time instruction by day at a university, college, school or other educational establishment.
Parental Leave Credits
Parents may take Parental Leave, either as a continuous block of 26 weeks or, with the agreement of the employer, broken up over a period of time. Parents who take Parental Leave will get a credit for each full week taken. This will ensure that existing cover for social welfare payments is maintained. Employers should write to Client Eligibility Services confirming the duration, number of weeks and exact dates of Parental Leave:
Maternity Leave Credits
Credits are automatically awarded to people in receipt of Maternity Benefit. Credits may also be awarded for unpaid Maternity Leave taken immediately after Maternity Benefit finishes. The person should ask their employer to complete the application form for Maternity Leave credits on their return to work.
Adoptive Leave Credits
Credits are automatically awarded to people in receipt of Adoptive Benefit. Credits may also be awarded for unpaid Adoptive Leave taken immediately after Adoptive Benefit finishes. The person should ask their employer to complete the application form for Adoptive Leave credits on their return to work.
Carer’s Leave Credits
People who take Carer’s Leave (temporary unpaid leave from work to care for someone) but do not get Carer’s Benefit or Carer’s Allowance qualify for Carer’s Leave credits for each week of Carer’s Leave up to a maximum of 104 weeks. The person should ask their employer to complete the application form for Carer’s Leave credits on their return to work.
Health and Safety Leave Credits
Health and Safety Leave is granted by an employer when the employer cannot remove a risk to an employee’s health and safety during her pregnancy or while she is breastfeeding, or cannot give her alternative ‘risk free’ duties. People who get Health and Safety Benefit are awarded Health and Safety Leave credits automatically.
These credits are administered by Maternity Benefit Section, McCarter’s Road, Buncrana, Co Donegal.
Volunteer Development Worker Credits
Provision has been made 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 (VDW) 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.
A person is classified as a VDW by the Department of Employment Affairs and Social Protection if they are working temporarily outside Ireland in a developing country on "Volunteer Terms" and their work has been arranged:
or
"Volunteer Terms" means that the remuneration the person receives for the work undertaken is consistent with local rates of pay in the developing country.
The credits awarded in respect of employment as a VDW whose employment was insurable at a modified rate of contribution (for example Class B, C, or D) 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 VDW are only reckonable for Widow/Widower's or Surviving Civil Partner's (Contributory) Pension, Guardian's Payment (Contributory), Carer's benefit and in some cases Occupational Injuries Benefit.
There is a special concession in relation to Treatment Benefit entitlements for volunteer development workers.
Change of Status Credits
Change of status credits, which are reckonable for State Pension only, are awarded when a client changes from reduced rate contributions (B, C or D) to full rate contributions (A or H) in the year they change over and for the previous contribution year. These credited contributions may be awarded on one occasion only.
Social Welfare Order Credits
Prior to 1 April 1974 insurable limits were in place. If a person’s salary exceeded the insurable limit he/she was not liable to pay social insurance. Social Welfare Order Credits were awarded to clients, whose employment became compulsorily insurable again, having been over the insurable limit. They were only awarded to allow a person to qualify for short-term benefits, if applicable.
Army Reservist Credits
Provision is made 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.
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 department 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.
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. The first medical certificate should be submitted with the CR35 application form. Subsequent annual medical certificates should be submitted on 1 January each year for as long as the person is incapable of work or until he or she reaches age 66.
An information leaflet together with an application form, "Giving up work due to ill health" (SW20/CR35) is available on request or online at wwwe.welfare.ie. The scheme is administered by CR35 Scheme, Department of Employment Affairs and Social Protection, McCarter’s Road, 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, that is the credits awarded are reckonable for Widow/Widower's or Surviving Civil Partner's (Contributory) Pension 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 (for example 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.
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