Can Employees Claim State Pension & Still Work in Ireland?

Reaching the State Pension age in Ireland doesn’t mean your employees have to stop working or retire.

Ireland allows workers to continue working beyond the age of 66 while claiming their State Pension.

Many employees opt to work past 66 to enhance their retirement savings and potentially increase the value of their pension pot.

Let’s discuss what employers need to know to support their workforce effectively.

Further Reading 

• Explore Ireland’s State Pension (Contributory) and learn everything you must know as an employer about employee eligibility, payment rates, and the application process. 

• Does your employee not qualify for the Contributory State Pension? Read our detailed guide about how they can apply for the State Pension (Non-Contributory) in Ireland. 

• Help your employees understand how Irish Pension Schemes work and the taxes they must pay on your pension income.

Can Your Employees Claim the State Pension and Still Work in Ireland?

Ireland allows workers to continue their careers while receiving the State Pension. However, there are different rules depending on the type of pension your employee receives.

The State Pension is a weekly payment made by the government to people aged 66 or above and is of two types:

• State Pension (Contributory): If your employees receive the State Pension (Contributory), working while claiming the State Pension will not affect their pension entitlements.

• State Pension (Non-Contributory): For the State Pension (Non-Contributory), your employee’s earnings from work can affect the pension amount they receive since it’s a means-tested payment.

What is a means test?

A means test assesses all employees' income sources to determine whether they qualify for the payment. 

The income assessed includes cash earned through employment, self-employment, occupational/private pensions, and capital like savings, investments, and property (except their home). 

Further Reading

• Do you have team members in the UK? Check out how Defined Contribution Pensions can help you and your employees.  

• Explore our ultimate guide to the UK State Pension system for information on employer-employee eligibility rules and other crucial details.

How to Support Employees Working Past the Retirement Age in Ireland

As an Irish employer, you may encounter these types of employees:

• Those who plan to retire around 65

• Those who wish to continue working beyond the retirement age

While there is no fixed retirement age in Ireland, most employment contracts include a mandatory retirement age. 

It’s also important to note that an employee’s retirement age isn’t the same as the State Pension age (66), which is when they qualify for the State Pension.

If your employees wish to work beyond the retirement age, they must:

• Submit a request to you at least three months before their retirement date.

• Attend a meeting where you, as their employer, will review the request and communicate your decision.

What’s next?

• If you approve their request, you must provide a fixed-term contract outlining the duration and all relevant legal terms.

• If you decline the request, employees have the right to challenge your decision, with the option of seeking assistance from a union representative during the appeal process.

Employees can also choose to work after retiring from their previous jobs, either in the same field or industry or in an entirely different career.

Let’s see how joining different employment sectors can impact your employees' pensions.

A. If Employee Is Working in the Public Sector:

• Their  State Pension (Contributory) allowance won’t be affected as it depends on his/her Pay Related Social Insurance (PRSI) contributions record. PRSI is a mandatory social insurance contribution deducted from an employee’s earnings to fund social welfare benefits. Employees don’t pay PRSI once they start receiving their pension. 

• Their State Pension (Non-Contributory) payment may be reduced as it's means-tested and assesses all their cash income from sources like employment, self-employment, and personal and occupational pensions. 

• Their public service pensions (public sector occupational pensions set up by the government) will be reduced. 

B. If Employee Is Working in the Private Sector:

• They can receive the State Pension (Contributory) payments while working and receiving other income, such as occupational pension and private (personal) pensions. However, they should confirm with you whether their occupational pension scheme permits contributions after age 66. 

• They may or may not receive the State Pension (Non-Contributory) entitlements as it’s a means-tested payment.

• If your employees were working in the private sector and you enrolled them in your occupational pension scheme, they can choose to continue working for you or transition to self-employment.

Wondering if your employees will tax relief on their contributions?

Check out our detailed guide on Tax Relief on Irish Pension Contributions.

4 FAQs About the State Pension in Ireland

Here are some common questions about the Irish State Pension: 

1. What Are the Irish State Pensions?

The State Pension in Ireland is a social welfare payment made by the Department of Social Protection. It’s a weekly payment for people aged 66 and above to help them sustain their basic cost of living in retirement. 

The two State Pension schemes available to your employees in Ireland are State Pension (Contributory) and State Pension (Non-Contributory). The contributory pension is also known as the old age pension.

Both schemes' personal rates and maximum rates vary as employees can get an increase for their qualified adult dependents (IQA) and qualified child dependents (IQC). 

2. When Can Your Employees Claim Their State Pension in Ireland?

The State Pension is paid to workers aged 66 and above. This qualifying age is called the State Pension age. 

• To claim the state pension (contributory or non-contributory), your employees must apply at least three months before their 66th birthday. 

• If your employee is an Irish citizen working abroad, they must apply for the State Pension (Contributory) at least 6 months before they turn 66. They can apply for the State Pension (Non-Contributory) only if they live in Ireland. 

Remember: Your employees can’t claim both the non-contributory pension and the contributory pension at the same time. 

However, they can apply for both, and the Department of Social Protection will assess their eligibility based on the PRSI contributions they paid during their working life and decide which scheme will benefit them. 

That’s because if your employee only qualifies for a reduced rate of the contributory State Pension, they may be better off under the non-contributory scheme.

3. Can Your Employees Claim an Irish State Pension If They Live or Work Abroad?

Yes, your employees can claim the Irish State Pension (Contributory) if they live or work outside Ireland.

However, they can’t claim the State Pension (Non-Contributory) because it requires employees to reside in Ireland to qualify for the pension payments. 

If your employees work or live in other European countries:

• They can combine their contributions in each European Union (EU) member state with their Irish social insurance record.

• They can also be eligible for a pro-rata pension (a portion of a full pension) if they don’t have enough Irish social insurance contributions. 

• Even though the UK left the EU in 2020, Irish citizens residing in the UK can still receive the Irish State Pension (Contributory) based on their social insurance contribution records.

If your employees work or live outside the UK or other EU countries:

• They can claim the State Pension if they have worked or lived in countries such as the US, Canada, Australia, New Zealand, Japan, and the Republic of Korea. Ireland has signed bilateral social security agreements with these countries, which allows Irish workers to join the State Pension scheme.

To claim the State Pension from abroad, your employees must send their application form by post to the Department of Social Protection in Ireland at: 

State Pension (Contributory) Section

Social Welfare Services, Department of Social Protection

College Road

Sligo

F91 T384 

Tel: (071) 915 7100 or 0818 200 400.

The department will contact the relevant institution in your employee’s country of residence to start the pension claim process. 

4. Till What Age Can Employees Continue to Work While Receiving State Pension in Ireland?

Irish employees can continue working full-time after 66 while receiving their pension payment for as long as they want. 

However, they may receive their pension entitlement at their standard personal rate. 

Ask your employees to contact the DSP for further information, including details on full rate increases for qualified adults and dependent children.

5. What Other Social Welfare Benefits Can Employees Claim While Still Working in Ireland? 

Some extra benefits your employees can claim include:

• Carer’s Allowance: If any of your employees provide full-time care for someone, they may qualify for Carer's Allowance. However, they can still work or participate in training or education for up to 18.5 hours per week.

• Household Benefits Package: It helps cover the cost of your employee’s gas/electricity bills and TV license. The package doesn’t explicitly exclude working people — the primary considerations are a person’s age and other social welfare payment status.

• Living Alone Increase: This is a social welfare payment for people on certain welfare schemes, like the State Pension, Invalidity Pension, etc., who are living alone.

• Widow's, Widower's, or Surviving Civil Partner's (Contributory) Pension: It’s a weekly payment made on the death of a spouse or civil partner and isn’t means-tested. So, it’s not affected by other income your employees may have, such as earnings from employment. However, they must not re-marry or have a cohabitant. 

Offer Additional Retirement Benefits to Your Employees With Kota 

According to a 2023 survey by Ireland’s Retirement Planning Council (RPC), 55% of Irish workers (above 50) plan to continue working full-time after retirement. 

The main reasons cited by the workers were the high cost of living in Ireland, the need to stay active and engaged, maintain social connections, and passion for their work. 

As an employer, you can help employees boost their retirement savings by supplementing their retirement income and offering extra benefits with Kota. 

What’s Kota?

Kota is a powerful digital pension app that lets you: 

• Enrol your employees in a compliant workplace pension scheme within minutes.

• Set flexible pension contribution levels for you and your employees.

• Sync pensions with your HR (human resources) and payroll tools for easy management. 

All that and more without any paperwork and other administrative overheads!

Join Kota to offer scalable retirement benefits to your employees today.