Hidden in the Budget documents – and not given much publicity – was a €45 million a year saving from cuts to some state retirement pensions for new claimants after Sept 2012.
Currently the contributory state pension is based on the amount of PRSI contributions made during a persons working life. The top rate of pension is given to those with a yearly average of 48 or more PRSI contributions . A lower rate – which is only €4.50 a week less – is paid to people with an average of 20-47 PRSI contributions per year over their working life.
People who have paid less than 19 contributions a year get €172.70 a year
For new claimants from Sept 2012 – some of the rates are being cut by as much as €29.80 a week. People with an average between 40 and 47 PRSI contributions will get the second tier level .
Those with an average of between 30 and 39 PRSI contributions per year will receive a lower rate of €207, while those with an average between 20 and 29 will get €196 a week – a drop of almost €30 a week.
People with average PRSI contributions between 15 and 19 will get €150 a week – and those with an average of between 10 and 14 will receive €92 a week, compared to €115.20 at present.
Summary of Pension Proposed Pension Changes Sept 2012
PRSI Contributions Per Year
Weekly Pension From Sept 2012
of Weekly Pension Cut