Case study: Calculating your pension under EU social security agreements

This example shows how entitlement to State Pension (Contributory) is calculated under EU social security agreements.

Case study

Peter is turning 66 years of age in 2024 and wants to know if he will qualify for a State Pension (Contributory).

Peter entered insurable employment 40 years ago. He started his working life in Ireland and worked in Ireland for 2 years in total. He has worked in Ireland for the last 5 years and before that he worked in Germany for 23 years and paid 1,196 contributions there.

He doesn't have any breaks in his employment record in Germany, that is, he worked in Germany continuously for 23 years immediately before coming back to Ireland. He therefore has 364 Irish contributions and 1,196 German contributions.

Peter's wife Maria is 61 years of age, her only income is from work. She earns €250 per week.

Step 1

First, you must check whether Peter would qualify for an Irish State Pension based on his Irish contributions alone.

You can calculate this by dividing the total number of Irish contributions (364) by the total number of years worked (40) since entering insurable employment.

Peter's yearly average number of contributions is 9.1. He would not qualify for an Irish State Pension (Contributory).

Step 2

Second, you must calculate Peter’s ‘notional rate of pension’. This is the rate of State Pension (Contributory) Peter would be entitled to if all his contributions were assessed as Irish contributions.

You can calculate this by dividing the total number of contributions, both Irish and foreign (1,560), by the total number of years worked since entering insurable employment (40).

Peter's yearly average number of contributions is 39, so his notional rate of pension is €249.30 (in 2024, this is the rate paid for people with a yearly average of 30-39 contributions).

However, Peter is also entitled to an increase in his payment for his wife, but he is not entitled to the maximum rate of increase for a qualified adult because she is earning €250 per week.

The rate of qualified adult increase payable is tapered for earnings between €100 and €310. The increase for his wife as a qualified adult is €71.70.

To get Peter’s total notional pension rate, add the first notional rate of pension (€249.30) to the increase he gets for his wife (€71.70).

Peter’s total notional pension rate is €321.

Step 3

Third, you calculate what pension Peter would get under EU social security agreements. You can do this by applying the following formula:

• (A x B) ÷ C = rate of State Pension (Contributory)

First, you multiply the notional rate of pension (A) by the total number of Irish contributions (B):

• €321 x 364 = €116,844

Then, you divide €116,844 by the total number of Irish and foreign contributions (C):

• €116,844 ÷ 1,560 = €74.38

Peter’s rate of State Pension (Contributory), calculated under EU security agreements and including an increase for his wife as a qualified dependant, is €74.38.