Special note about social insurance and pensions.
Part of preparing for an assignment overseas should include thinking about your options for remaining within the Irish social insurance system. Considering one’s options for social protection may seem unimportant now, however it becomes extremely important for returning international volunteers and development workers in accessing short-term benefits upon return, such as Unemployment Benefit, Maternity Benefit, and Treatment Benefits and for state pension entitlements upon reaching retirement age.
The Support Services Team in Comhlámh is available to provide information on current options for remaining within the Irish social insurance system. For further information please contact us on 01-4783490 or email info@comhlamh.org.
If you are a public servant serving as a development worker after 1 January 1995 on an authorised leave of absence or career break, you may be entitled to avail of the Public Service Pension Scheme.
Being retained on the Irish System?
What does being retained on the Irish system mean?
You can become a posted worker and retained on the Irish system if your employer/sending agency meets certain criteria. Being retained means that you are liable for PRSI contributions while you are working overseas.
What conditions do I have to meet to be a posted worker?
You must be employed temporarily outside the State; Your employer/sending agency must be resident in Ireland or have a place of business in the state; You must be subject to Irish social insurance prior to being posted; You must remain under the direct control of your employer/sending agency for the duration of your posting
When you say I can only be employed temporarily outside the State, how long does this mean?
Normally a person can be retained on the Irish social insurance system for up to 12 months but extensions can be granted for up to five years.
What is the cost of PRSI to my sending agency and me?
The PRSI contributions that you make are based on a percentage of your gross earnings.
A Ready Reckoner is available here.
Do I have to earn a minimum amount to be retained?
Yes. Your gross earnings while overseas have to be high enough to attract liability for PRSI.
If I am retained, how do I pay the PRSI and how is it collected?
If you are a posted worker, the Special Collection Section of the Department of Social and Family Affairs collects PRSI due.
The employee’s share of PRSI is automatically deducted from your earnings at source and is payable to the Special Collection Section by way of an end of year return made by your employer/sending agency which is due by 15 February after the end of the year in which it is due.
I would like to be retained on the Irish system, what do I have to do?
You may want to talk to the Special Collection Section first for further information then talk to your employer/sending agency to see if they will consider retaining you on the Irish system as a posted worker. If you go ahead, your sending agency will apply to the Special Collection to retain you under national legislation.
What is Comhlámh’s role in being retained?
Comhlámh does not have an explicit role in development workers being retained on the Irish system. We raise awareness amongst development workers and volunteers going on assignment that this may be an option open to you to protect your special welfare rights. We also lobby sending agencies to consider retaining their volunteers under their duty of care.
Where can I find out more about being retained?
Special Collection Section
Telephone: (051) 356 010/356 011
Why is it important to protect my PRSI and social welfare rights?
It is important that you maintain, as far as possible, your social insurance record. If you leave the workforce in Ireland, it is important that you keep your social insurance record active. There are a wide range of short-term and long-term benefits that are available to people who have paid social insurance. It may not be possible to make up gaps in the future, and if you can, it may be expensive. Significant gaps in your social insurance record can result in a reduced pension payment.
What options do I have to protect my social welfare rights?
You have three options to protect your social welfare rights while on assignment.
- The Volunteer Development Worker Scheme
- Paying Voluntary Contributions
- Being retained on the Irish System under national legislation
What is PRSI?
PRSI stands for Pay Related Social Insurance and is payable by employers, employees and self-employed people on earnings. In general, everyone between 16 and 66 years of age, who is in insurable employment, must pay PRSI.
If you are an employee, your social insurance contributions are deducted by your employer and collected by the Revenue Commissioners. In fact, the law makes your employer responsible for PRSI, though you may have to pay an ’employee’s share’.
PRSI is paid into the national Social Insurance Fund that is made up of a current account and an investment account managed by the Minister for Social Protection and the Minister for Finance, respectively. The current account consists of monies collected from people in employment. This money is then used to fund social insurance payments. The investment account is a savings account that is managed by the Minister for Finance.
All records of your insurance contributions are kept and managed by the PRSI Records section in the Department of Social and Family Affairs. The Department is responsible for the payments made as a result of your social insurance contributions.
Sometimes, you will hear people describe their PRSI contributions as “stamps.” This term dated from before 1979 when employers would literally stamp a card each week of employment. That card was then brought to a local social welfare office in order to claim social welfare payments.
What are the different classes of PRSI?
For people in employment in Ireland, social insurance contributions are divided into different categories, known as classes or rates of contribution. The type of class and rate of contribution you pay is determined by the nature of your work. Most employees in Ireland pay Class A PRSI. This class of contribution can entitle you to the full range of social insurance payments that are available from the Department of Social and Family Affairs, if you meet the qualifying criteria.
The other classes of social insurance are Classes C, D, B, E, H, J, S, K, M, and P. If you are insured under one of these classes, you are paying insurance at a lower rate than Class A contributors, which means that you are not entitled to the full range of social insurance payments. This is because you are paying less towards social insurance than a Class A contributor.
The amount of PRSI you pay will depend on your earnings and the class you are insured under.
What are PRSI Credits and what is the difference to a paid contribution?
Credited contributions (Credits) are social insurance contributions that are awarded by the Department of Social Protection to an insured person without a Pay Related Social Insurance (PRSI) payment being received from the insured person. Credits are recorded on your social insurance record.
The purpose of Credits is to help protect the social insurance entitlements of insured persons during periods when they may not be in a position to pay contributions.
This difference is important because for some social welfare benefits you must have paid a minimum number of weekly contributions.
For more information about PRSI please see the social welfare website.
Public Service Pension Scheme for Development Workers - FAQs
I am a public servant; can I protect my PSP while on assignment?
Yes – public servants may be able to get their pension contributions paid under the Public Service Pension Scheme for VDWs under certain conditions.
When did the PSPS for VDWs begin?
The Scheme applies to service after 1 January 1995.
Is there a minimum amount of time I must be on assignment?
Yes. The Scheme is available to those who serve overseas for six consecutive months or more, up to a maximum of two years.
Does my assignment have to be co-funded by Irish Aid to be eligible?
Yes. To avail of the Scheme, you assignment must be co-funded by Irish Aid.
If I join a PSPS during my assignment, am I am eligible to avail of the PSPS for VDWs?
No. You, the applicant, must be a member of a public service pension scheme at the start of your assignment.
Is cover for the dates of my assignment overseas or the dates of my career break/leave of absence or contractual dates?
Cover under the Scheme is available for the actual time you are overseas on assignment and not actual contract dates or dates you are on a career break or authorized leave of absence.
Do I have to be on an authorized leave of absence or career break?
It is a feature of the Scheme that you are required to be on an authorized leave of absence or a career break while on assignment.
Is there a maximum amount I can earn while on assignment to be eligible?
Yes. The Scheme is open to those who are on ‘volunteer terms’. Contact Comhlámh for more information about this criteria.
Does my assignment have to be in a developing country?
Yes. In general, a country on the List of Recipients of Official Development Assistance drawn up by the Organisation for Economic Co-Operation and Development is considered a developing country.
Is my pension paying authority (PPA) the same as my employer?
Not necessarily. Check with your Human Resources Department who your PPA is.
What is Comhlámh’s role with regard to the PSPS for VDWs?
Comhlámh role is to ensure that you meet the criteria of the Scheme e.g. verifying conditions of a career break, verifying the length of assignment etc. Our role is also to request an invoice from your PPA when we know that you are home and ensure that payment is made in a timely fashion.
Before I go overseas, what do I have to do?
Before you go overseas, you need to complete part 1 of the application form for the PSPS for VDWs. Then ask your employer to complete part 2 and send the form to your sending agency to complete part 3. Your application form should then be sent to Comhlámh to verify your assignment and confrim with Irish Aid that your assignment is co-funded.
When I return from my assignment is there anything that I need to do?
As soon as you return from your assignment, it is important that you let Comhlámh know so that we can request an invoice from your PPA and organize payment. Following this, check that your PPA has invoiced Comhlámh for your contributions. As the volunteer/development worker, it is your responsibility to ensure that an invoice is sent to Comhlámh.
Is there a time limit for claims?
Yes. All claims for payment must be made within twelve months of the end of the qualifying service, after which neither Irish Aid nor Comhlámh can accept any responsibility in the matter.
How will I know when Comhlámh has paid my contributions?
When Comhlámh has issued a cheque to your PPA upon receipt of an invoice, we will write to you, and confirm the date of payment, the amount, and whom it was paid to.
I still have questions about the PSPS for VDWs – who can I talk to?
Please contact the office for info via info@comhlamh.org
What are Voluntary Contributions and why would I want to pay them?
Voluntary Contributions are PRSI contributions you can opt to pay if you are between the age of 16 and 66 and are no longer covered by compulsory PRSI by way of insurable employment, self-employment, or credited contributions.
Voluntary contributions can help maintain your social insurance record and help you to qualify for social insurance payments in the future.
Is it compulsory to pay Voluntary Contributions?
No. There is no legal require requirement to pay Voluntary Contributions if you are outside of insurable employment or not receiving a Credit.
Are there any conditions I have to meet to be eligible to pay VCs?
Yes. To pay Voluntary Contributions you have to meet three criteria: have paid at least 260 weeks PRSI in either employment or self employment;
you must apply to make your voluntary contribution within 12 months after the end of the last completed tax year (contribution year) during which you last paid compulsory insurance or you were last awarded a credited contribution; agree to pay voluntary contributions from the start of the contribution week that follows the week in which you leave compulsory insurance.
How much would I have to pay?
There are three rates of voluntary contributions. The rate of voluntary contribution you pay is the same as the last PRSI contribution paid or credited by you.
If you paid PRSI at Class A, E or H you pay a high rate contribution of 6.6% of your reckonable income in the previous tax year, subject to a minimum payment of €317 and maximum payment of €3,075.60.
If you paid PRSI at Class B, C or D you pay a low rate contribution of 2.6% of your reckonable income in the previous tax year, subject to a minimum payment of €126 and maximum payment of €1,211.60.
If you have paid PRSI at Class S, you pay a special flat rate €253.
Am I entitled to different social insurance payments depending on the rate of Voluntary Contributions that I have to pay?
Yes.
High rate Contributions cover:
- State Pension (Transition)
- State Pension (Contributory)
- Widow’s or Widower’s Contributory Pension
- Guardian’s Payment
Low rate Contributions cover:
- Widow’s or Widower’s Contributory Pension
- Guardian’s Payment (Contributory)
- Bereavement Grant
Special rate Contributions cover:
- State Pension (Contributory)
- Widow’s or Widower’s Contributory Pension
- Guardian’s Payment (Contributory)
- Bereavement Grant
So the Social Insurance benefits I would be entitled to are not the the same as for the VDW Scheme?
Correct. Voluntary contributions cover for long-term benefits, such as pensions. They do not cover short-term benefits such as those for illness, unemployment,maternity, occupational injuries and dental and optical treatment.
How do I apply to pay VCs?
You need to complete form VC1 and send it to the Voluntary Contributions Section of the Department of Social Protection.
What is Comhlámh’s role with regard to VCs?
Comhlámh does not have an explicit role with regard to Voluntary Contributions. We raise awareness amongst volunteers and development workers that they may be an option to consider in protecting your social welfare rights while you are on assignment.
I have more questions, who can I talk to?
Voluntary Contributions Section, Department of Social Protection.
Telephone: (051) 356000/01 704 3000
Fax: (051) 877838
E-mail: volcons@welfare.ie
What is the Volunteer Development Worker Scheme?
DOWNLOAD THE VOLUNTEER DEVELOPMENT WORKER FORM
Am I considered a VDW for the Scheme?
For the purposes of the Scheme, a VDW is someone:
- who is working temporarily outside Ireland;
- who is working in a developing country;
- whose work has been arranged by or through an NGO in Ireland or another EU member state or directly with the Government of the developing country you are going to;
- who receives remuneration considered to be “volunteer terms” (contact Comhlámh for more information about this criteria)
What is the background to the VDW Scheme?
An EEC Council recommendation in 1985 required each EEC member state to ensure that volunteers working in a developing country on a temporary basis were not disadvantaged with regard to their social welfare rights.
In Ireland, this gave rise to national legislation to take account of this recommendation and led to the creation of the VDW Scheme.
I have to be working in a developing country – what are they?
In general, a country on the List of Recipients of Official Development Assistance drawn up by the Organisation for Economic Co-Operation and Development is considered a developing country. The up to date DAC list of ODA recipients can be found over here.
Are there any other conditions I have to meet?
Yes. You must be over 16 years of age, and be resident in Ireland immediately prior to starting your assignment.
I have to prepare for my assignment before going overseas – is this period covered under the VDW Scheme?
Yes. The VDW Scheme can cover a preparatory period before your assignment begins. This preparatory period needs to be directly related to your assignment to be eligible.
When I return home, I have to “finish” my assignment by writing a report or otherwise wrapping it up. Is this period covered?
Yes. If you are completing work that is directly related to your assignment, such as producing a report or writing up research upon your return then this period can be covered.
When can I be awarded VDW Credits from?
The award of VDW credits has been in place since 6 April 1983.
I didn’t know about the VDW Scheme before I went overseas, can I apply now?
Yes. It is currently possible to apply for the VDW Scheme retrospectively. However, we recommend that you apply before you go on assignment because processing ‘behind the scenes’ may delay your entitlement to social welfare payments if you wait until you come home.
Does it cost anything to avail of the Scheme?
No! There is no cost to you as the volunteer for availing of the VDW Scheme.
How long can I be awarded VDW Credits for?
VDW Credits can be awarded for a maximum of five years. Different periods of work are aggregated in calculating the five years.
What options are open to me if I do not qualify for this scheme or have already been awarded 5 years of VDW Credits?
If you do not qualify for the VDW Scheme, there are two options that may be open to you: being retained on the Irish System under National Legislation or paying Voluntary Contributions.
Why do I need to identify myself as an RDW if I make a claim?
Certain qualification conditions are relaxed and benefit years extended for the payment of Unemployment Benefit, Disability Benefit, Maternity Benefit, and Treatment Benefit for returning VDWs, so it is important to identify yourself as a returned VDW when making a claim to ensure that the relaxed qualification conditions are applied to your claim.
In the booklet, it says I must have paid a minimum of 104 weeks PRSI since starting work to avail of the Scheme. I don’t think I have – does that mean I cannot apply?
No. If you have less than the 104 paid contributions, Comhlámh (on behalf of Irish Aid) will pay Class A Contributions to bring your total up to the required 104.
I’m a member of a religious order – can I apply?
Members of religious orders whose work exclusively involves pastoral duties are not considered VDWs for the purpose of this Scheme.
How do I apply?
Complete Part 1 of the application form and ask your sending agency to complete Part 2. Either your sending agency or yourself as the volunteer should then send your application to Comhlámh.
Whose responsibility is it to ensure that my application form reaches Comhlámh?
The responsibility for ensuring that your application form reaches us at Comhlámh rests with you, the volunteer, and not with your sending agency.
Once my sending agency has counter-signed my application and returned it to Comhlámh what happens next?
Once Comhlámh has received your application form, we validate the credentials of your sending agency and verify that you are working overseas on “volunteer terms”. Following this validation, we contact the Special Collection Section of the Department of Social and Family Affairs who notes the period of your assignment.
Why is it important to notify Comhlámh when I return from my assignment?
Your VDW Credits are not actually awarded until Comhlámh knows that you are home from your assignment. Unless Comhlámh has been notified that you are home, your VDW Credits will not be awarded and your entitlement to Social Welfare payments may be delayed.
What are the contact details of the Special Collection Section, Department of Social and Family Affairs?
Their address is Special Collection Section, Department of Social Protection, Social Welfare Services Office, Cork Road, Waterford. Telephone: 051 356 011.
I still have some questions – who can I ask?
Please contact the Comhlámh office for more information and we will try to answer any questions you may have.
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