Some people take early retirement in order to take up another job or to become self-employed. Many people aged over the "normal" retirement age are employed. There are a small number of occupations that have statutory upper age limits but, in general, there is no rule which prevents people over the age of 65 from being employed or self-employed. Many self-employed people continue to be so well past the "normal" retirement age.
If you are receiving a social welfare benefit such as State Pension (Transition) working may affect your entitlement. If you were a permanent and pensionable public servant, your pension may be abated if you go back to work in the public sector. It is generally not possible to further contribute to an occupational pension scheme after the normal age of retirement.
There are specific tax arrangements for people aged over 65 including the taxation of pensioners.
Upper age limit for working
In general, there is no upper age limit for employment. In certain jobs, there is a statutory upper age limit and there is a mandatory retirement age in many contracts of employment. You cannot continue to work in a job beyond the statutory age limit nor can you take up such a job if you are above the age limit. If your contract of employment includes a mandatory upper age limit, then you must retire when you reach that limit. However, it is open to you and your employer to negotiate another contract. If you are subject to a statutory or mandatory retirement age in your job, there is nothing to prevent you taking up a different job when you retire or taking up self-employment.
Effect on social welfare payments
If you are receiving any social welfare payment other than the State Pension (Contributory) or Widow's/Widower's (Contributory) Pension, working will affect your entitlement.
Jobseeker's Benefit or Assistance
It may be possible to do some part-time work and retain entitlement to part of your Jobseeker's Benefit or Assistance
Pre-Retirement Allowance
Again, it may be possible to do some work and retain some entitlement.
State Pension (Transition)
You are effectively prevented from working if you are receiving a State Pension (Transition) and you are aged between 65 and 66. One of the conditions for receiving a State Pension (Transition) is that you must be retired. In this context, being retired means that you must not be in insurable employment or self-employment. That means that, if you have earnings, they must be less than €38 a week from employment or €3,174 a year from self-employment. If you have an income from savings or investments, you could be liable for self-employed PRSI but that would not debar you from a State Pension (Transition) if you are not actually engaged in self-employment.
This condition ends when you reach the age of 66. At that stage, you may have earnings from any source without affecting your entitlement to a State Pension (Transition). At age 66, you may continue to receive State Pension (Transition) or you may transfer to the State Pension (Contributory) if that would be to your advantage. From age 66, it does not matter what your pension is called, the retirement condition no longer applies.
State Pension (Contributory)
If you are receiving the State Pension (Contributory), you may work or be self-employed without affecting your entitlement.
Occupational pensions
If you are receiving an occupational pension, then you may also work or be self-employed and if you are receiving a private sector pension, working or being self-employed does not usually affect it.
However, most public sector pension schemes are subject to what is called abatement if you return to work in the public sector. The precise conditions may vary from one scheme to another but, in general, abatement means that the pension is reduced in order to ensure that you do not earn more between the pension and the income from employment than you would if you had remained in employment. If you are getting a public service pension and you go to work in the private sector, your pension is not affected.
Contributions to occupational pensions
If you are employed, you may contribute to the new employment pension scheme if you are eligible. Most occupational pension schemes do not cater for contributions over the age of 65 but it is possible that some do. It is possible to get tax relief on contributions up to age 70.
If you are self-employed or your new employment does not include an occupational pension, you could decide to make arrangements for a personal pension. Again, the upper age limit for tax relief for such contributions is 70.
Protective employee legislation
Most legislation dealing with the protection of employees does not have an upper age limit. So, if you are an older worker, whether full or part-time, you are covered by protective legislation dealing with the following areas:
Information about your terms and conditions of employment
Holiday and leave entitlements
National minimum wage
Maximum working hours
Health and safety
Minimum notice - the amount of notice is related to the length of service.
If you lose your job and your employer owes you money for arrears of pay, holidays and a number of other items, you may claim this from the Redundancy and Employers' Insolvency Fund.
Unfair dismissal
Under the Unfair Dismissals Acts, dismissal on the grounds of age is unfair with certain exceptions. People who must leave employment when they reach the retirement age stated in their contract may not claim unfair dismissal.
If you are unfairly dismissed, at whatever age, you may complain to the Employment Appeals Tribunal which may order reinstatement or compensation.
Redundancy
If you are made redundant you may be entitled to a redundancy payment. If you are aged 66 or over and you were made redundant before 8 May 2007 you are not eligible for a statutory redundancy payment.
Equality
The Employment Equality Acts 1998-2008 prohibit discrimination on 9 grounds including that of age (with certain exceptions). They apply to all ages above the age a person is statutorily obliged to go to school (16 currently). The Equal Status Act 2000 never had an upper age limit but it has been also been amended by the Equal Status Act 2004 to make it easier to bring a discrimination case on the grounds of age (as well as 9 other grounds).
Social insurance (PRSI) payments
If you are aged under 66 and you are employed or self-employed, you are liable to pay PRSI in the normal way. This applies regardless of what you did earlier. For example, if you are a former public servant and you take up a job in the private sector, you have to pay full PRSI. In these circumstances, you may be able to qualify for a pro-rata old age contributory pension.
You only pay PRSI on your income from employment or self-employment. You do not have to pay PRSI on your pension from a former employment.
If you take up part-time work or low paid work, you are still in the PRSI system but you may not have to pay anything. If you earn less than €352 a week, you don't have to pay PRSI. If you earn over €38, your employer has to pay and you have full cover. Once you step over the €352 limit, you have to pay on all your income from work above €127 a week until you reach the employee PRSI ceiling.
You are not liable for PRSI contributions after the age of 66 - this is the case whether or not you are employed or self-employed. If you do not have enough contributions at age 66, you cannot add to them after that. Unlike some occupational pension arrangements, there is no facility to retrospectively pay PRSI contributions.
If you are aged 66 and in employment, your employer pays a small PRSI contribution to cover you for occupational injuries. This is called Class J social insurance.
Health levy
Even though the health levy (4%) is usually deducted with your PRSI contribution, the rules which apply to it are quite different. It may be charged on all your income so you may have to pay it on your pension from your former employer.
You may not be liable for the health levy if:
You have a medical card
Your income is less than €500 a week. Once you go above this limit, you have to pay the 4% on all your income, unless you are otherwise not liable.
You are receiving a Widow's/Widower's Pension or any of the one-parent family benefits from the Department of Social and Family Affairs or the equivalent from an EU member state.
The rate of 4% applies from 1 May 2009. Income up to that date is charged at 2%. There is a higher rate of 5% (4% up to 1 May 2009) which applies to income over €174,980 (€250,120 up to 1 May 2009).
This information is from the Citizens Advice Information Bureau. For further information, please go to www.citizensinformation.ie or visit your local citizen's information office. You may also phone the Citizen's Informtion phone service: 1890 777 121.
