From 1 January 2024, a person will be able to draw down their State Pension (Contributory) between age 66 and 70.

This will give a person the opportunity to continue to work and pay PRSI which may improve their contribution record at the date they decide to draw down their State Pension (Contributory).

As it stands, a person who is an employee and is aged 66 or over does not pay PRSI on their income (although their employer will pay Class J at the 0.50% rate).

A self-employed person who is currently aged 66 or over does not pay PRSI (returned at Class M, nil contribution).

From 1 January 2024, the upper age limit for PRSI exemption is being changed by legislation from age 66 to age 70. This will apply to the employee, the employer and the self-employed PRSI liability.

This change will apply to all persons who are employees and the self-employed with the exception of the following main categories:

  • people who have already been awarded the State Pension (Contributory)
  • people who have already reached 66 years of age by 1 January 2024 (born before 1 January 1958)

The PRSI position for people who have already reached age 66 by 1 January 2024 will be unaffected by the changes.

For example, employees do not have to pay PRSI on their income and their employer will continue to pay Class J at the 0.5% rate.

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Returning the correct PRSI Class is important

It is important for an employer to return the correct PRSI class as an incorrect return could lead to:

  • an overpayment of PRSI by both the employee and employer
  • an underpayment of PRSI by both the employee and employer
  • issues for contributors in allowing them to claim their social insurance entitlements

 

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Employer

Changes for employers

From 1 January 2024, employers will need to know whether their employee, who is aged between 66 and 70 and born after 1 January 1958, has been awarded the State Pension (Contributory) to assign the appropriate PRSI class.

Therefore, employers will need to confirm with any of their employees who are aged between 66 and 70 and born after 1 January 1958, whether they have been awarded the State Pension (Contributory).

When a person is awarded the State Pension (Contributory) the letter from the Department of Social Protection advises them that if they continue to work after being awarded their State Pension (Contributory) it is important to inform their employer they are in receipt of State Pension (Contributory) to ensure they do not pay PRSI.

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Employee

Changes for employees

From 1 January 2024, employees aged between 66 and 70 and born after 1 January 1958 will continue to be liable for PRSI until such time as they are awarded the State Pension (Contributory) or reach age 70.

Once an employee is awarded their State Pension (Contributory) and continues to work, it is vital that the person informs their employer to ensure they do not continue to pay PRSI (PRSI Class J will apply).

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Self-employed

Changes for the self-employed

From 1 January 2024, self-employed persons aged between 66 and 70 and born after 1 January 1958 will continue to be liable for PRSI until such time as they are awarded the State Pension (Contributory) or reach age 70.

Once a self-employed person is awarded their State Pension (Contributory) and continues to work, they will not be liable for PRSI (PRSI Class M will apply).

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Examples

Examples

Ann (not in receipt of State Pension Contributory)

Ann is 68 (date of birth 9 August 1955) employed in retail and earning €100 per week, not in receipt of State Pension (Contributory).

Current position

Ann’s earnings are not subject to PRSI as she is over 66 years. PRSI Class J applies.

Position from 1 January 2024

Ann’s earnings are not subject to PRSI as she is over 66 years on 1 January 2024. PRSI Class J continues to apply.

Mary (is in receipt of State Pension Contributory)

Mary is 68 (date of birth 9 August 1955), employed in retail and earning €100 per week, in receipt of State Pension Contributory.

Current position

Mary’s earnings are not subject to PRSI as she is over 66 years as at 1 January 2024 and she is in receipt of State Pension (Contributory). PRSI Class J applies.

Position from 1 January 2024

Mary’s earnings are not subject to PRSI as she is over 66 years on 1 January 2024 and she is in receipt of State Pension (Contributory). PRSI Class J continues to apply.

Joe (does not have State Pension Contributory entitlement)

Joe is 65 (date of birth 9 August 1958), employed in retail and earning €100 per week, does not have a State Pension (Contributory) entitlement.

Current position

Joe’s earnings are subject to PRSI as he is under 66 years but under current rules his earnings would become exempt from PRSI when he reaches 66 years on 9 August 2024. PRSI Class A currently applies.

Position from 1 January 2024

Joe’s earnings will continue to be subject to PRSI as he was born after 1 January 1958, is under 70 years, and is not in receipt of State Pension (Contributory). PRSI Class A continues to apply after age 66.

Pat (has a State Pension Contributory entitlement)

Pat is 65 (date of birth 9 August 1958) employed in retail and earning €100 per week, and has an entitlement to State Pension (Contributory), which he intends to exercise, on attaining 66 years.

Current position

Pat’s earnings are subject to PRSI as he is under 66 years but under current rules his earnings would become exempt from PRSI when he reaches 66 years on 9 August 2024. PRSI Class A currently applies.

Position from 1 January 2024

Pat’s earnings will be exempt from PRSI from his 66 birthday (9 August 2024) as he will be in receipt of State Pension (Contributory) from that date. PRSI Class J will apply from age 66.

Sean (decided not to take his State Pension Contributory at 66)

Sean is 65 (date of birth 9 August 1958) employed in retail and earning €100 per week and has an entitlement to State Pension (Contributory) on attaining 66 years.

However, Sean has decided to not take his State Pension (Contributory) at 66 and defer to a later date.

Current position

Sean’s earnings are subject to PRSI as he is under 66 years but under current rules his earnings would become exempt from PRSI when he reaches 66 years on 9 August 2024. PRSI Class A currently applies.

Position from 1 January 2024

Sean’s earnings will continue to be subject to PRSI as he was born after 1 January 1958, is under 70 years, and is deferring his receipt of State Pension (Contributory) that is, is not in receipt of State Pension Contributory. PRSI Class A will continue to apply.

Table for PRSI Classes A & S contributors post age 66

PRSI CLASSBORN BEFORE/AFTER
1 JANUARY 1958
CURRENT PRSI CLASS UNDER AGE 66CURRENT PRSI CLASS AFTER AGE 66FROM 1 JANUARY 2024 AGE BETWEEN 66 & 70 & NOT BEEN AWARDED SPCFROM 1 JANUARY 2024, AGE BETWEEN 66 & 70 AND HAVE BEEN AWARDED SPCPRSI CLASS POST AGE 70
ABeforeAJJJJ
AfterAJAJJ
BBeforeSMMMM
AfterSNSMM

Address:

PRSI Policy,

Department of Social Protection,

Áras Mhic Dhiarmada,

Store Street,

Dublin 1,

D01 WY03

Website:     www.gov.ie/prsi
Email:         PRSIPolicy@welfare.ie

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