It can be difficult to wrap your head around pensions – and just when you think you’ve got it figured out, they start throwing terms like “non-contributory pension” at you! 

Fortunately, we’ve got you covered. If you want to know about the non-contributory pension in Ireland and how it differs from the regular state pension, read on.

State pension: contributory vs non-contributory

The regular state pension is the contributory state pension, but it’s rarely called this.

The idea is that you work, make Pay-Related Social Insurance (PRSI) contributions as part of what you’re taxed on your income, and then you rack up enough contributions to qualify for the pension.

Simple.

The non-contributory state pension is, as you might guess, a version of the state pension that doesn’t require PRSI contributions. This enables people who haven’t worked for long enough to qualify for the state pension to be able to claim an income in retirement.

How much is the non-contributory pension in Ireland?

If you are aged between 66 and 80, you are entitled to a maximum non-contributory pension of €266 per week. If you are aged 80 or over, you are entitled to a maximum of €276 per week.

These figures are adjusted based on a means test (see below) and depend on if you’ve any dependents. Your pension increases by €175.70 for an adult dependent under the age of 66, and by up to €54 for a child dependent[1].

Other benefits with the non-contributory pension

In addition to the non-contributory state pension, you may be entitled to one or more other benefits.

These include welfare allowance schemes, rent supplements, fuel allowance, and more. Citizens’ Advice provides a full list of the extra benefits available.

The non-contributory pension means test

A means test is used to determine if you qualify for the non-contributory pension and if so, how much you are entitled to receive.

The value of your savings, investments, and cash is added together and assessed. The value of the house that you live in is not considered for this, but rental income may be.

The first €20,000 is not considered for assessment, but the remaining balance is assessed. Any deductions will be applied based on this.

Amount	Deduction Per Week
First €20,000	Nil
Next €10,000	€1 per €1,000
Next €10,000	€2 per €1,000
Remaining balance	€4 per €1,000

Source: Citizens’ Advice – State Pension (Non-Contributory), April 2024

What this means is that if you have savings, investments, personal pensions, and cash totalling €61,000 then you would see the following deductions:

• €0 per week for the first €20,000,
• €10 per week for the next €10,000 (€1 x 10),
• €20 per week for the next €10,000 (€2 x 10),
• €84 per week for the remaining balance (€4 x 21).

This means that deductions of €114 per week would be applied to your weekly payment. Note that several other factors will affect your means test and payment amount (if any).

Concerned about retirement income?

If you’re worried about how to manage your finances in retirement, then speaking to a financial advisor will help. Financial advice isn’t just for the wealthy; anybody at any income level can benefit from talking to an expert.

  

[1] Rates of Payment 2024 | Department of Social Protection