Money Mentor: Homemaker’s pension

Dear Money Mentor,

I saw your article on the Irish Farmers Journal recently. I was looking for some advice.

I looked for my pension last year and applied for the contribution pension, but was refused, as I did not have enough contributions. I worked before I got married. My husband Paul has not reached retirement age and is still working. We had three children, so I gave up work and gave Paul my tax credits since then. We have 35 acres of land. So I stayed at home, looked after the sheep and minded the children.

Anyway, when I was refused I was told to apply for the non-contributory pension and be means-tested. I did that and went to meet a social welfare person. They told me I probably wouldn’t get much, but I’d get something because Paul is still working and using my tax credits. Anyway, I got nothing: totally refused. I appealed and I still got nothing.

Anyway, my query is: when Paul retires, will I get anything? Should I go to someone in particular to talk to? If something happens to Paul in the meantime, am I left with getting nothing?

I was told that it was taken into account the years I stayed at home to mind our kids?

When I asked in my local social welfare office, they just laughed at me! If I had known, I would not have given Paul my tax credits.

Thanks in advance,

Jennifer

Hi Jennifer,

On the face of it, your situation seems like a complicated query. However, when you examine it closely, it can be broken down to one key question: Did you make 52 self-employed PRSI contributions before you reached the retirement age of 66?

As you did not, unfortunately as it stands, you will not be entitled to much from the state contributory pension. I talked to Noel Leahy, from Donohill, Co Tipperary, who assists people with claims, especially where they have missed out in the past. Noel confirmed this and said it really does highlight the importance of PRSI contributions, especially for people close to retirement.

You said you worked on the farm and minded the children. In many of the situations like yours, there are two ways to boost your average contributions.

The Homemaker’s Scheme

The Homemaker’s Scheme, introduced from 6 April 1994, is when a man or woman provides full-time care for a child under the age of 12 or an ill or disabled person aged 12 or over.

Under the scheme, any years that you spent as a homemaker are ignored or disregarded when working out your yearly average contributions for a State Pension (Contributory).

However, the most important point is that you would need to have paid in at least 10 years (520) of PRSI contributions to avail of it. The social welfare office was correct, but that’s no excuse for the official who laughed, as you said. The person should not have done that. The homemaker’s scheme is open to women and men. Noel recently had a case where a male farmer who stayed at home on the small farm and minded the children did benefit. Using the homemaker’s scheme boosted his pension by €50 per week. He did have the 520 PRSI contributions, but the average yearly contributions were low.

SCOPE Section

The Department of Social and Family Affairs’ SCOPE Section looks at specific cases where farmers have been farming individually or in partnership, but have not paid the correct contributions.

Under SCOPE, you can retrospectively pay and get credited previous PRSI contributions if you can prove that you were farming in partnership with your husband.

Unfortunately – and this is a key point for every farmer or their wife – you must have had at least 52 self-employed PRSI contributions paid before you were 66 to be eligible. As you did not, you cannot apply for the SCOPE Section.

In the past, you had to choose one option or the other when making a case. However, more recently, I have heard that social welfare will consider the best option for people to maximise what they are entitled to. It is important to understand each one if you need to boost contributions.

In your situation, I’m afraid I don’t have much in the line of good news for you.

You did not say if Paul works off farm, but I assume he does, as he was using your tax credits.

One of your other queries is what happens when Paul retires. You can claim adult dependence allowance, which is up to a maximum of €213.50 per week. To get this, you will be means-tested on your income and assets. The value of your own home is not taken into account, but income either from work or from other property is. Any savings over €20,000 are also taken into account. This means that the amount could be reduced.

You also asked what happens if something happens to Paul now. If he dies and he has been paying PRSI contributions, you would get the widow’s pension of €238 per week. This is not means tested. CL

Have you a query for the Money Mentor? If so, email pyoung@farmersjournal.ie or write to Money Mentor Peter Young, Irish Country Living, Irish Farmers Journal, Bluebell, Dublin 12

In brief