Client Connect – The State Pension

The State Pension is a great benefit, the value of which is often overlooked. A State Pension payment of €12,912 (current maximum payment for a person aged 66 following Budget 2019). This would cost approximately €400,000 to buy in the open market. There have been some material changes in the State Pension recently which we explain below.


There were a number of changes brought in with the 2012 budget. Firstly, there was a new hurdle introduced to qualify for a State Pension. Whereas before, you needed 260 PRSI contributions to qualify for a pension, you now needed 520 contributions. In effect this meant that you needed 10 years of monthly PRSI contributions instead of 5 years to qualify for a State Pension.

And more importantly for most people, they introduced new bands. Although you could qualify for a State Pension having worked for 10 years, there were different levels of State Pension which were based on an “averaging calculation”. These extra bands reduced the weekly pension payable to people with an average of less than 40 PRSI paid or credited contributions per year of their working life. More often than not the people who had an average of between 20 and 40 PRSI contributions were people (mostly women) who took time out from the workforce to care for their children…

This content is a preview of a Client Only communication – to obtain the full documents please contact the office on 01 498 0007.

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