Case study: Working and claiming a State Pension (Non-Contributory)
This case study shows the effect of work on State Pension (Non-Contributory) (rates from 30 March 2018)
Joe is 67 years of age and has been claiming a State Pension (Non-Contributory) for a little over a year. He receives an increase in his payment for his wife Jean. Jean is 62 years old and works part-time as a book-keeper. She earns €130 a week net. (Net earnings are total earnings less deductions for PRSI, private health insurance, superannuation and union dues.) They have no other income but have savings of €56,000.
At the moment Joe's pension payment is the maximum State Pension (Non-Contributory) €385.30. Their total weekly income is €515.30.
Joe has been offered some part-time work as a caretaker in a local school. If he takes the job his net weekly wage will be €260. Jean is thinking of increasing the number of hours she works. Her new net weekly income would be €206.
Joe wants to know how his State Pension (Non-Contributory) will be affected if he starts work in the local school and Jean increases the number of days she works.
Joe and Jean's new assessable means.
Joe's assessable income from work (See note 1) €60
Add Jean's assessable income from work (See note 2) €6
Add income from savings (See note 3) €16
Divide by 2 to get their assessable weekly means: €41
Total assessable weekly means (See note 4) €41
Weekly State Pension (Non-Contributory) (See note 5) €364.50
Their new total weekly income will be €830.50
(Total income is made up of Joe's State Pension (Non-Contributory) and their income from work).
Joe's assessable income from work: Joe will earn €260 (net) per week. €200 is not taken into account. Therefore Joe's assessable income from work is €60.
Jean's assessable income from work: Jean will earn €206 (net) per week. €200 is not taken into account. Therefore Jean's assessable income from work is €6.
Income from savings for a couple is calculated as follows:
|Next €20,000||€1 per €1,000 per week|
|Next €20,000||€2 per €1,000 per week|
|Excess €80,000||€4 per €1,000 per week|
If you are married or are cohabiting with another person as husband and wife, your means will be taken as half the joint means of you and your spouse/civil partner/cohabitant.
Joe's new personal rate of State Pension (Non-Contributory) is €219.50. He also gets an extra amount or increase of €145 for Jean as a qualified adult. You can find out more about the rate of pension paid after means are assessed.