Self-employment and voluntary PRSI contributions

I have been self-employed for many years and paid contributions at Class S which count towards my pension. This year I had to cease trading and sign on for Jobseeker’s Allowance. I’m worried about my pension. What can I do to maintain my insurance record?

You are right to be concerned. People who paid PRSI contributions at Class S do not get credited contributions or ‘credits’ with Jobseeker’s Allowance. If you wish to maintain your insurance record you can opt to pay voluntary contributions. Voluntary contributions can help maintain or improve your contributory pension entitlements (including State Pension and Widow’s/Widowers Pension). They do not provide cover for any short term benefits such as Jobseeker’s, Illness or Maternity Benefit.You must apply to become a voluntary contributor within 12 months of the end of the last contribution year (runs January to December) during which you paid compulsory PRSI or had a credited contribution.

To become a voluntary contributor you must:

·              Be aged between 16 and 66

·              Have at least 260 weeks (5 years) PRSI paid under compulsory PRSI in either employment or self‑employment, and

·              Agree to pay voluntary contributions from the start of the contribution week after the week in which you last paid compulsory PRSI or had a credited contribution

You pay a special flat rate of €253 each year if your last PRSI contribution was at Class S. If your last PRSI contribution was at Class A, E or H you pay 6.6% of your reckonable income in the previous contribution year. The minimum annual payment is €317.00. You pay a lower rate of 2.6% if your last PRSI contribution was at Class B, C or D and in this case your minimum annual payment is €126.00.

To become a voluntary contributor, you must complete application form VC 1, available from welfare.ie or from the Voluntary Contribution Section, Social Welfare Services, Cork Road, Waterford. Telephone: (051) 356 000 or (01) 704 3000 E-mail: volcons@welfare.ie

Further information is available from the Citizens Information Centre below.