New flexible pension arrangements for people turning age 66 and applying for State Pension (Contributory) are being introduced from 1 January 2024. Under the new regime, people can defer claiming the State Pension (Contributory) at age 66 to receive...
New flexible pension arrangements for people turning age 66 and applying for State Pension (Contributory) are being introduced from 1 January 2024.
Under the new regime, people can defer claiming the State Pension (Contributory) at age 66 to receive an actuarially adjusted higher payment rate up to age 70.
The change will enable people to improve their social insurance record and potentially increase their rate of State Pension payment when they retire, or allow those who started working later in life to make additional contributions to qualify for a contributory State Pension.
Social protection minister Minister Humphreys commented: The main aim of this change is to provide people with more choice. Those who wish to get their State Pension (Contributory) at age 66 can still do so. They also still have the option of continuing to work.
Whats new is the option to delay the date on which people start receiving their State Pension. It may seem like the obvious choice to start receiving your pension payment as soon as youre eligible, but this wont be right for everyone.
For example, being able to work longer and continuing to pay PRSI gives people the chance to build up contributions and potentially increase their State Pension payment rate. Or you may have entered the workforce later in life and may not have the required contributions to qualify for a pension at 66.
The minister added: These new options will allow workers to build up social insurance contributions to meet the qualifying criteria.
Humphreys commented: The main aim of this change is to provide people with more choice." Pic: Leah Farrell/RollingNews.ie
The measure is being introduced for those who turn 66 from January 2024. Therefore, the first people to be eligible for a higher rate will be those who turn 67 in January 2025.
Based on a person qualifying for the maximum rate of 277.30 State Pension (Contributory) on reaching age 66 on or after 1 January 2024, the proposed maximum rates for each year of deferral are as follows:
290.30 at age 67
304.80 at age 68
320.30 at age 69, and
337.20 at age 70.
These rates of payment are based on January 2024 rates of State Pension (Contributory) and are subject to change in future budgets.