Voluntary PRSI contributions
Paying social insurance can help you to qualify for social insurance payments, such as the State Pension (Contributory). If you are an employee Pay Related Social Insurance (PRSI) deductions are made from your earnings each week.
If you are no longer an employee or if you are self-employed and you are no longer making compulsory PRSI contributions, you can opt to make voluntary contributions. If you are getting a social welfare payment or signing for credits you may get credited contributions which will also keep your social insurance record up to date.
Voluntary contributions can help maintain your social insurance record and help you to qualify for social insurance payments in the future. They cover long-term benefits such as pensions. They do not cover short-term benefits for illness, maternity or jobseekers.
You can choose to pay voluntary contributions (if you are under 66 and meet the other conditions) if you:
- Are no longer covered by compulsory PRSI in Ireland
- Are no longer covered by PRSI on a compulsory or voluntary basis in another EU country
If you are working outside the EU and not subject to Irish or EU social insurance contributions you may also opt to pay voluntary contributions.
If you are taking time off work to care for children under 12 years of age, or a disabled child or adult, the Homemaker’s Scheme may be a better option than making voluntary contributions.
To be eligible to make voluntary contributions you must:
- Have at least 520 PRSI contributions paid under compulsory insurance in either employment or self-employment
- Apply to make your voluntary contribution within 60 months (5 years) of the end of the last completed tax year (contribution year) during which you last paid compulsory insurance or you were last awarded a credited contribution. (From February 2017, the time limit for making voluntary contributions is extended from 12 months to 60 months.)
- Agree to pay voluntary contributions from the start of the contribution week that follows the week in which you leave compulsory insurance
The contribution year is the same as the income tax year so it runs from January to December.
Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie