Early retirement usually means retirement before the age of 65.
Early retirement may happen because you have to retire from your job at a certain age, because you choose to take early retirement or because you have been let go. Sometimes people who are described as taking early retirement have actually been made redundant. Others who have been obliged to take early retirement may regard themselves as unemployed and there are special provisions for older jobseekers.
This document outlines your entitlements to social welfare benefits if you retire early and what arrangements you should make to keep your entitlement to a state pension.
If you are made redundant, you may get a statutory redundancy lump sum. If you retire early, for whatever reason, you may be entitled to Jobseeker's Benefit and later to Jobseeker's Allowance. You may also be eligible for a range of back to work and back to education schemes.
If you do retire early you should organise to continue your PRSI contributions so that your entitlement to an State Pension (Contributory) is maintained (see 'Credits' below).
If you are made redundant
If you are made redundant, you may qualify for a statutory redundancy lump sum payment. The statutory (that means laid down by law) lump sum is the minimum sum that you must get. A higher payment may of course be negotiated with your employer, either by you or by your union. You can get more information about redundancy on our website.
If you are unemployed
Whether you consider yourself to be retired or unemployed, you may be eligible for Jobseeker's Benefit (JB) if you are aged under 66. You may then be eligible for Jobseeker's Allowance (JA).
If you are claiming JA or JB and you are 62 or over you are not required to engage with the activation process and you will not be subject to penalty rates for non-engagement. Note that to qualify for either Jobseeker’s Benefit or Allowance you must be genuinely seeking work and be available for full-time employment and these conditions will continue to apply to older jobseekers. You can voluntarily avail of a range of supports (for example, training or employment support programmes) from the Department of Social Protection. Read more in our document on older jobseekers.
Jobseeker's Benefit (JB)
To qualify for Jobseeker's Benefit (JB), you must, among other things, be unemployed, aged under 66, capable of work, available for work and genuinely seeking work.
If you have left work voluntarily, for example, if you have chosen early retirement, you may not get JB for 9 weeks after leaving work. After that, you may have a problem proving that you are available for and genuinely seeking work.
If you are aged under 55 and you have received a redundancy payment of more than €50,000, you may be disqualified from JB for 9 weeks.
You can do a certain amount of work and continue to get some Jobseeker's Benefit. You should check with the Department of Social Protection before taking up work to see exactly what the effect will be.
As a general rule, JB is payable for either 9 months or 6 months. However, if you are aged between 65 and 66 when your JB would normally end, you can continue to get it until the age of 66, provided you meet the PRSI requirements.
Jobseeker's Allowance (JA)
If you have used up your entitlement to JB or you are not entitled to JB because you do not have enough PRSI contributions, you can apply for Jobseeker's Allowance (JA) if you are under 66. You must, among other things, be unemployed, be capable of, available for and actively seeking work and pass a means test.
In general, if you have a reasonable level of pension from a former employer, you are unlikely to qualify for JA.
Back to education
If you have been getting an unemployment payment for some time, you may be eligible for the Back to Education Allowance.
Safeguarding your entitlements
If you retire early and do nothing, you will have a number of years during which you have no PRSI contributions. This will mean that you may have difficulty in qualifying for the State Pension (Contributory) .
If you are not employed or self-employed, you do not have to pay PRSI contributions. You can keep your PRSI contribution record up to date either by getting credits or paying voluntary PRSI contributions.
You get social insurance credits while getting Jobseeker's Benefit and Jobseeker's Allowance. So, if you are getting one of these benefits up to age 65 or 66, you do not need to do anything else to maintain your social insurance record.
If you do not qualify for Jobseeker's Allowance because you do not pass the means test, you can sign on for credits. Usually, you are allowed sign on once a month.
If you do not qualify for Jobseeker's Benefit or Jobseeker's Allowance because you are considered to be unavailable for work, you may not be able to sign on for credits either. If this is the case or if, for example, you want to spend all or part of your retirement abroad, you can become a voluntary contributor to social insurance. You should apply to the Department of Social Protection to become a voluntary contributor within a year of retirement.