Case study 2: Calculating your pension under bilateral social security agreements
This is an example showing how your entitlement to State Pension (Transition) is calculated under bilateral social security agreements.
Case study
Mary worked in Ireland for just over eleven years and has 600 Irish contributions. She has spent the last 23 years working in the US and has 1,200 contributions paid there.
She will be 65 next month and has returned to Ireland to retire. She wants to know if she will qualify for the State Pension (Transition) when she is 65 years of age.
Step 1
Calculate Mary’s 'notional rate of pension'. This is the rate of State Pension (Transition) Mary would be entitled to if all her contributions were assessed as Irish contributions. To find the notional rate of pension, calculate the total of all Mary’s contributions (both foreign and Irish) and divide it by the number of years worked in Ireland and abroad.
Total of all Mary's assessable contributions: 600 + 1200 = 1,800 contributions
Total number of years worked: 11 years in Ireland and 23 years in the USA = 34 years
Total number of contributions by the number of years worked: 1800 ÷ 34 = 52.9
Mary’s yearly average number of contributions is 52.9
Mary’s notional rate of pension is the maximum rate because she has a yearly average contribution of 52.9. This is more than the required yearly average of 48 for the maximum State Pension (Transition).
Therefore, her notional rate of pension is the same as the maximum rate of State Pension (Transition) of €230.30.
Find out the rate of State Pension (Transition) based on your yearly average number of contributions.
Step 2
Then apply the formula (A x B) ÷ C = rate of State Pension (Transition)
A = the notional rate of pension
B = the number of Irish contributions
C = total number of contributions (Irish and foreign)
You take the figure for the notional rate of pension and multiply by the total number of Irish contributions (B):
€230.30 x 600 = €138,180
Next, divide €138,180 by the total number of Irish and US contributions which we calculated earlier to be 1800:
€138,180 ÷ 1800 = €76.76
Mary’s rate of State Pension (Transition) is €76.76.
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- Case study 1: Calculating your pension under EU social security
agreements
Case study showing how to calculate your pension entitlement under EU social security agreements - Combining social insurance contributions from abroad
Combining social insurance contributions paid in Ireland and abroad can help you qualify for a social welfare payment. Find out more. - State Pension (Contributory )
The State Pension (Contributory), previously called the Old Age (Contributory) Pension, is payable to people aged 66 and over who have worked and paid enough social insurance contributions.
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