Q.  What are the planned changes to state pensions? I turn 65 next year and my wife will turn 65 in 2015. I’ve worked all my life and my wife took care of our children and only started paid employment outside the home in 1996. How will the changes affect us?

16.05.10

Substantial changes to how contributory State pensions are calculated and when they are paid are planned. The proposed changes will not affect you but they will affect your wife.

The age at which people qualify for a State Pension will increase – to 66 in 2014, 67 in 2021 and 68 in 2028. The State Pension (Transition) will be abolished in 2014. This means that your wife will not get a State Pension Transition at 65 in 2015.

Currently to qualify you must have a minimum of 260 paid PRSI contributions (5 years) over your working life. Your pension is then based on your yearly average of contributions (both paid and credited). You need a minimum yearly average of 20 contributions to qualify for a pension and 48 for a full rate pension.

From 2012 you must have a minimum of 520 paid contributions (10 years) over your working life. Your wife will have 20 years of paid contributions by the time she retires in 2016 so she will meet this requirement. She will qualify for a full pension based on her 20 years’ contributions with a yearly average of 48 contributions if she continues to work full time.

This yearly average method for calculating contributions will continue until 2020. After that the system will change to a total contribution system. A minimum of 520 (10 years) paid contributions will give you one-third of the total pension rate. Thirty years contributions will give you a full pension. A maximum of 10 years of credits will be taken into account.

Citizens Information: Buncrana 074 9363496; Carndonagh 074 9373741

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