Social Insurance – PRSI / Voluntary Contributions
Paying social insurance can help you to qualify for social insurance payments, such as the State Pension (Contributory), Illness Benefit, Jobseekers Benefit. If you are an employee Pay Related Social Insurance (PRSI) deductions are made from your earnings each week. Most employees pay Class A PRSI. If you are self-employed, you pay Class S PRSI.
If you are no longer an employee or if you are self-employed and you are no longer making compulsory PRSI contributions, you can opt to make voluntary contributions. If you are getting a social welfare payment or signing for credits you may get credited contributions which will also keep your social insurance record up to date.
Voluntary contributions can help maintain your social insurance record and help you to qualify for social insurance payments in the future. They cover long-term benefits such as pensions. They do not cover short-term benefits for illness, maternity or jobseekers.
You can choose to pay voluntary contributions (if you are under 66 and meet the other conditions) if you:
- Are no longer covered by compulsory PRSI in Ireland
- Are no longer covered by PRSI on a compulsory or voluntary basis in another EU country
If you are working outside the EU and not subject to Irish or EU social insurance contributions you may also opt to pay voluntary contributions.
If you are taking time off work to care for children under 12 years of age, or a disabled child or adult, the Homemaker’s Scheme may be a better option than making voluntary contributions.
If you are self employed and are aged between 16 and 66 you pay Class S PRSI of 4% on all your income for tax purposes, that is, gross income less allowable expenses. You must pay 4% of all your income or €500, whichever is greater.
If you earn less than €5,000 from self-employment in a year you are exempt from PRSI, but you may pay €500 as a voluntary contributor (if you meet the other conditions).
You can make voluntary contributions of PRSI which will increase your State Pension, this can be useful for artists who are self employed. The best way to find out where you are with your social insurance payments and when you should make voluntary contributions is to contact Citizens Information with your PPS number and they can look it up for you. You can call them on their national number at 076 107 4000. Be sure to ask about your contributions in relation to state pension and ask how many consecutive years you need to have paid to qualify for higher rates.
Northern Ireland
The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on.
More information and guidance can be found on the following links: