Lots of Irish people worked in Britain, the US, Europe and further afield before coming home. Gerry Scully explains how the pension contributions they made while working abroad can be used to get a better pension in Ireland.
Dear Age Action,
I worked abroad for a few years and made social security contributions and I'm now back living in Ireland. I've heard that my contributions outside of Ireland can be used to get a better pension here. Is that correct?
Michelle from Ennis
Depending on where you worked, the answer is yes.
You can use them if you don’t have enough Irish Contributions or to possibly get a pension from the other country or countries in which you worked.
If you worked in one or more countries with which Ireland has a bilateral social security treaty you can use contributions you made in those countries to increase the value of your Irish pension.
Ireland has nine separate bilateral treaties with foreign countries that allow people claiming Irish pensions to use the contributions they made there to get a better pension.
The exact system for doing this varies from country to country but they are roughly similar. And remember that because we are part of the European Union we have default agreements with the other 27 countries of the EU.
How it works
When you apply for an Irish State Pension you are asked to indicate if you worked abroad and to give details of any employment you had while abroad. This will include name of employer, your address and your social security number while there.
If you do not have enough Irish contributions to entitle you to a full pension (at least an average of 48 over your working life) the Department of Employment Affairs and Social Protection will automatically contact the equivalent department in the other country or countries you’ve worked to find out what contributions you made there.
The Department of Employment Affairs and Social Protection will then use the combination of your Irish and foreign contributions to figure out the pension you should get.
The United States will also allow you to use your Irish contributions to qualify for a full American pension even if you are also using them to get a pro-rata pension from the Irish government. In effect, you can use the same Irish contribution twice.
It really is worth checking with the social security department in each country you have worked to see how they calculate pension entitlement using foreign contributions.
It might be easier to understand if we have an example. Colm worked for five years in Ireland and 30 years in the United States. He has 280 Irish contributions and 560 American.
Since he doesn’t have enough Irish contributions he would not normally be eligible for a State Pension but because there is a treaty with the United States he can use his American contributions.
The Department adds together his Irish and American contributions to get a figure of 840 which is divided by the 35 years of Colm's working life to give a yearly average of 24.
In theory, this would entitle him to a pension of €202.80.
But because Ireland uses the principle of pro-rata payment there is a second calculation to determine the portion of your entitlement that Ireland will pay.
They multiply the notional pension entitlement €202.80 by the number of Irish contribution and divide the answer by the total number of contributions
So, 202.80 is multiplied by 280 and then divided by 840 to give Colm a total weekly State Pension of €67.60.
He might also be entitled to some form of pension from the United States and he should contact them to find out.
Countries with which Ireland has these agreements
- All EU member states
- New Zealand
- Quebec (They have a slightly different protocol than the rest of Canada)
- Republic of Korea
- The Swiss Confederation
- The United Kingdom (at the moment covered by EU regulations)
- The United States of America