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People working past retirement age do not need to inform government to receive higher pension pay outs, department confirms

18/01/2024 Posted by IAPF | Comments(0)

PEOPLE who plan to delay their state pension to get a higher payment under a new scheme do not need to notify Department of Social Protection officials, it has been confirmed.

The first individuals to qualify for the government’s new deferred pension – which will be paid at a higher rate – will not get it until January next year.

Those who qualify will draw a pension that is €13-a-week higher than the full contributory pension.

It will be worth €290.30 compared with the current pension rate of €277.30 a week, according to department estimates.

To be eligible, you must have turned 66 since January 1 this year.

The first individuals who will be able to draw the higher pension rate will turn 67 next January.

The new scheme has been welcomed for giving those who want to work beyond traditional pension age the opportunity to do so.

But there are also calls for the government to introduce a similar scheme to allow people to draw the state pension earlier, by reducing the payment.

“If a person chooses to defer, they do not need to notify the department,” said a department spokesperson.

He said that an application for a state pension beyond the age of 66 will automatically be treated as a claim for a deferred pension.

“If a person chooses to defer, they can drawdown their pension at any stage up to the age of 70,” he said.

“A person will need to defer until their 67th birthday to avail of the first enhanced rate. If a person draws down their pension nine months after their 66th birthday, then they will get the 66 rate of state pension with a maximum of six months backdated as was always the case for late applications.”

Those that decide to prolong drawing the pension beyond a year will qualify for higher rates.

If they decide to wait two years, they will qualify for a pension worth €304.80 per week at 68.

At the age of 69, they would get €320.30 a week.

If they do not draw their pension until they are 70 – they will get €337.20 a week.

This is €59.90 a week higher than the full pension rate for 66-year-olds.

Jerry Moriarty, CEO of the Irish Association of Penson Funds, thinks the scheme is a good idea.

“I think it gives a bit of extra incentive to people who might be thinking of working on later,” he said.

“Many think they should retire at pension age or miss out. I think it would be good if it worked the other way too, so people who go earlier could get a reduced pension. You will always have people who can’t work.”

He said it is a step in the right direction, and moves away from the idea that there is one date that you should finish work.

“I’m not sure if there is enough incentive, but basically people are getting the same value,” he said, in terms of the financial benefits.

“It will be interesting to see what the take-up is in a few years’ time.”

The department spokesperson said “certain” social welfare payments will be available to those over 66 in deferral- but will be deducted when the enhanced pension entitlement is calculated.

He said the base rate of €277.30 may increase in the next budget.

Read the original article here

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