Borderwise Booklets
Issue 1
10TH January 2007
Going South – Retirement
©
NIACAB (Northern Ireland Association of Citizens Advice Bureaux)
This booklet
provides general advice and information for people living in Northern Ireland who want to retire to the Republic of Ireland. It includes an explanation of the
entitlements and benefits available to retired people and gives details on
transferring pension or other entitlements from the North.
S4 Going South – Retirement
This leaflet is
for you if you live in the North and you want to retire to the South or if you
intend to go to South to work for a period and then retire. It tells you about
transferring your pension or other entitlements from the North and about the
benefits you may get while living in the South. It covers the general rules –
there is not enough space to give all the details. You may get further
information from the addresses and websites listed.
The information
in this leaflet is mainly for citizens of the EU/EEA. Citizens of all
countries, including citizens of the EU and EEA member states, may have to
establish habitual residence in the Common Travel Area (Ireland, the UK, the
Channel Islands and the Isle of Man) before they can qualify for certain
benefits. Citizens of the EU/EEA member states and refugees are entitled to
combine social insurance contributions paid in two or more member states in
order to qualify for benefits and they are entitled to transfer certain benefits
from one member state to another. Citizens of other countries may acquire
entitlement to the insurance based benefits after working for a period and may
acquire rights to other benefits after a period of legal habitual residence.
The information
in this leaflet was compiled in January 2006. Subsequent changes may affect
the accuracy of the content.
Retirement Age
There is no
official retirement age in the Republic of Ireland, however 65 is generally
regarded as the age when most people retire at.
Before You
Move
You may get
information on your entitlements from Northern Ireland from
Department for
Social Development
Operational
Support Division
Overseas Benefits
Unit Block 2
Castle Buildings
Stormont
Belfast BT4 3SP
www.dsdni.gov.uk
Retired Early
- Retired before you move South
If you have
retired to the South before UK state pension age and you are not making any
social insurance contributions in the South you should enquire about keeping up
your UK national insurance contributions – contact HM Customs and Revenue: http://www.hmrc.gov.uk/faqs/vol-conts.htm
You may get a UK
State pension forecast from the Centre for Non-Residents:
HM Revenue &
Customs
Centre for Non-Residents (Newcastle)
Longbenton
Newcastle Upon Tyne
NE98 1ZZ
United Kingdom
Helpline:
00441912037010
www.hmrc.gov.uk/cnr
If you have moved
to or are resident in the South and have worked in the North or other parts of
the UK you can apply for a UK Retirement Pension by contacting the
International Pension Centre whose contact details are:
International
Pension Centre
Tyneview Park
Newcastle Upon
Tyne
NE98 1BA
Tel: 0044 191 218
7777
Fax: 0044 191 218
7293
Retired Early
- Retired having worked in the South
You may be
eligible for the various unemployment or disability payments described in
Leaflet S2.
Maintaining
your contributions
If you have
worked in the South before you retire and you are not receiving any social
welfare payment you should find out how to maintain your social insurance
record so that you do not lose out on retirement and old age pensions. You can ask the Records Section of the Department
of Social Community and Family Affairs (DSFA) to tell you whether or not you
have enough contributions to qualify for an Old Age Contributory Pension. They
can tell you how many contributions you have already and how many more you need
to ensure your entitlement. There are specific rules in relation to
making voluntary contributions. www.welfare.ie
Retirement Payments in the South
State Pension (Transition)
The State Pension (Transition) is payable
to people in Ireland aged 65 who have retired from work and who have enough
social insurance contributions. It is not means tested. In general you must
have been an employee and paying full-rate social insurance contributions. You
cannot be employed while receiving a State Pension (Transition), however at 66,
you will transfer to the State Pension (Contributory) after which you may earn
an income from any source. You should apply four months before reaching 65 and
application forms are available from you local social welfare office.
State Pension (Contributory)
The State Pension (Contributory) is payable
to people in Ireland from the age of 66 who have enough social insurance
contributions. It is not means tested and you may have income from any other
source while receiving it. You must contact your local social welfare office to
clarify exactly how much you may be entitled to.
State Pension (non-contributory)
State pension (Non-Contributory) is a means
tested payment for people aged 66 or over who do not qualify for the State
Pension (Contributory) based on their social security record. In order to
qualify you must:
- Be ordinarily
resident in Ireland
- Be aged 66 or
over
- Have a valid
Personal Public Service Number (PPS No.)
- Satisfy a means
test
In order to apply
for a State Pension (Non-Contributory) you must complete an application form
available from your local post office, social welfare office or the Department
of Social and Family Affairs.
Personal
Retirement Savings Account (PRSA)
PRSA are
generally low cost, easy access private pension savings accounts. They are
designed to allow you to save for retirement. You are entitled to invest in a
PRSA regardless of your employment status. For further information contact the
Pensions Board +353 1 613 1900 or www.pensionboard.ie
The Free Schemes
The free schemes
are available to everyone aged 70 and over resident in the South. People under
70 years of age may qualify for some or all of the schemes:
Free Travel: This is available to everyone aged 66
and over and to people who are receiving certain benefits for people with
disabilities.
Household Benefits
Package: This includes
the Free Electricity Allowance, Free TV Licence and Free Telephone Rental
Allowance. These are also available to people aged 66 and over who are
receiving certain social welfare payments or whose income is below certain
limits and to certain people with disabilities. If you are resident in the
South, aged 66 or over, and in receipt of a UK Retirement Pension you may
qualify for this package.
National Fuel Scheme
This scheme
provides a weekly fuel allowance for 29 weeks from the end of September to the
middle of April. It is a means tested allowance available to low income
households in receipt of certain qualifying payments.
Farm Retirement Scheme
This scheme is
for farmers aged over 55 who transfer their land to a younger famer. Apply to
the Department of Agriculture and Food. The early Retirement scheme (ERS 3)
2007 was introduced in June 2007. Farmers who retire early under the scheme and
who transfer their land to a younger farmer may be eligible for a pension of up
to €15,000 a year for up to 10 years. The scheme also provides a pension for
retiring farm workers, in certain circumstances. More information is available
online at: www.agriculture.gov.ie
Combining your contributions from each Country
If you have paid
social insurance contributions in two or more EEA member states you may be
entitled to a pension or partial pension from each country awarded on a pro
rata basis. (Similar arrangements may apply with certain other countries with
which there are bilateral social security agreements).
If you have paid
social insurance contributions in the South and the North, you should apply for
a retirement pension initially to the country in which you live. The
Department for Work and Pensions (DWP) in the UK and the DSFA in Ireland then work out how much you get from each.
Each looks at the
situation in two ways and then grants you whichever is most beneficial.
(a) They see if
you can qualify for a pension on the basis of contributions paid in that
country only
(b) They then
look at the contributions in the two countries and see what pension you would
get if these had all been paid in the country in question. They then calculate
what proportion is applicable.
(c) You get the
higher of (a) and (b) from each country.
If you have paid
contributions for 10 years in the North and then paid for 30 years in the
South, the DSFA would make the following calculations:
- They would
assess how much Retirement Pension/OACP you would get on the basis of your
30 years contributions
- They would then
assess what you would get if all your 40 years had been paid in Ireland and calculate three quarters of that
- They would pay
you the highest amount of those two calculations
The DWP would
make these calculations:
- They would
assess how much State Pension or OACP you would get on the basis of your
10 years contributions.
- They would then
assess what you would get if all your 40 years had been paid in the UK and calculate one quarter of that
- They would pay you the highest amount of
those two calculations
Occupational Pensions
Occupational
pensions and Personal retirement Savings Accounts (PRSAs) are regulated by the
Pensions Board (see Leaflet S1). The Board has produced a number of leaflets
on the operation of the Pensions Act. It provides information to members of
pension schemes as to their rights under the legislation. If you have a
complaint, the Board will advise you about your rights.
www.pensionsboard.ie
The Pensions
Ombudsman investigates and decides on individual complaints relating to
occupational pensions and PRSAs.
www.pensionsombudsman.ie
Retired at State Pension Age
If you are
already getting State Pension from the North you may transfer it to the South
when you move. See booklet N4.
Winter Fuel
Payment(s)
This payment is
explained in leaflet N4. If you move to the South and previously qualified for
a winter fuel payment in the North or another part of the UK you may be able to continue to
receive the payments in the South. The payments are made automatically to you if you are receiving State
Retirement Pension from the UK. Winter Fuel Payments Helpline: 08459 151515
Taxation
In general, when
you are retired, you have to pay tax as you did when you were in employment
(see leaflet S1). There are some features of the taxation system which are especially
relevant to retired people.
Occupational pensions
and social welfare pensions are taxable. Many pensioners do not actually have
to pay tax because their income is too low. If your only income is a social
welfare pension or payment, you do not normally have to pay any tax because you
do not have enough income. If you have both an occupational pension and a
social welfare pension, then you may have to pay tax. The level of income
exempt from tax is greater if you or your partner are aged 65 or over (see
below).
Occupational
Pensions
Occupational pensions
are taxed in the same way as salaries and wages. If you are getting an
occupational pension from the South it is usually taxed by PAYE in exactly the
same way as you were taxed while employed. If your pension comes from the
North or another part of the UK you will be subject to self assessment and
subject to the exemption limits explained below. You may have to pay tax in a
lump sum annually. However if you pay income tax to Revenue in the UK on your
occupational pension you may be entitled to double taxation relief which will
serve to reduce any potential tax liability to Revenue in Ireland. You may
also be able to apply to Revenue in the UK for a tax exemption on the basis
that you are not resident in the UK. This will mean that your occupational
pension is only taxable where you reside in Ireland.
You may find out
about the UK tax which may apply from
Inland Revenue
Centre for Non-Residents
St John’s House
Merton Road
Bootle
MerseysideL69 9BB
Tel: +44 151 210
2222.
http://www.hmrc.gov.uk/pensionschemes/pts.htm
Tax Exemption
Limits
Exemption limits
are limits below which no tax is payable. They are not the same as tax free
allowances or tax credits.
The exemption
limits for people aged 65 and over for the year 2006 are as follows:
Single/Widowed
person: €17,000
Married
Couple €34,000
There are slight
increases if you have dependant children.
If you expect
that your income for the year will be less than these limits you should tell
the Inspector of Taxes who will arrange that tax will not be deducted.
Tax Credits
In ROI tax
credits are reductions in your income tax liability. There are some tax
credits which are only available to people over 65 and there are some which are
designed for people who care for an elderly or incapacitated relative. The
following are the most important of these:
Age Credit
This is
additional to the personal tax credit and may be claimed once you or your
spouse reach the age of 65.
Tax Credit for
Rent Paid
A higher tax
credit is available to people aged 55 and over in respect of rent paid for
private rented accommodation.
Dependent
Relative Tax Credit
You may qualify
for this tax credit if you maintain:
- a relative of
either yourself or your spouse who, because of old age or infirmity, is
incapable of maintaining himself/herself
- your or
spouse’s widowed parent, regardless of incapacity
- a child (of any
age) who lives with you and on whose services you are dependent because of
old age or infirmity.
Employed
Person taking care of an incapacitated spouse
If you employ a
person to take care of an incapacitated member of your family you may get a tax
free allowance. This has not been changed to a tax credit.
Other Benefits for Older People
Driving Licences
The general rules
about qualifying for a driving licence apply to everyone, regardless of age.
There are also some special rules which are age related.
Aged under 60: you may apply for a three year or a ten
year driving licence.
Aged between
60 and 67: you may no
longer apply for a ten year licence. Instead, you may apply for a driving
licence which expires at age 70 or for a three year licence.
Aged 67 or
over: you may only apply
for a three year licence. A one year licence may be issued if, for medical
reasons, a longer term licence cannot be granted.
Aged 70 +: you may apply for a one year or three year
licence and you must provide a medical report when applying for a driving
licence.
People over 70
must provide a medical report when applying for a driving licence. There are
circumstances in which a medical report is required in order to get a driving
licence, regardless of age. If you are aged 70 or over, you do not have to pay
for your driving licence.
Passports
There is no age
restriction on the issuing of passports but a standard ten year passport is
free of charge for people aged 65 and over.