Don't lose out on your old age pension

Voluntary Social Security Contributions

Voluntary contributions allow you to remain insured once you leave the compulsory PRSI system.  Voluntary Contributions are not compulsory but you may choose to pay them, provided you meet certain conditions.   Voluntary contributions cover long-term benefits such as pensions – so the year for which you pay a voluntary contribution will count as a qualifying year for pension purposes.   However, the voluntary contributions do not cover short-term benefits such as illness, unemployment, maternity and treatment benefits.

For as little as €253 per annum for people who were previously self employed you will keep your entitlement to old age pension.

How do I become a Voluntary Contributor?

To become a voluntary contributor you must:

• have paid at least 260 weeks PRSI in either employment or self employment, AND
• apply within 12 month of the end of the contribution year during which you last paid compulsory insurance or 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.

What rate of contribution do I pay?

The rate you pay is based on the rate of the last PRSI contribution paid or credited to you.  If you last paid insurance at Class A then you pay 6.6% of your reckonable income (subject to the income ceiling and a minimum amount) in the previous tax year.  If you last paid Class S then you pay a flat rate of €253 per annum.

Imelda Prendergast is Partner OSK Contracting and OSK Small Business Support.