While the Irish State Contributory Pension age remains 66 years, since 1 January 2024, it has been possible for individuals who will first reach 66 after this date to defer receipt until a maximum of 70 years of age1. The rules apply for both employed and self-employed individuals. The changes do not apply to any individual who already reached 66 or was already receiving the State Pension (Contributory) prior to 1 January 2024.
The new rules have an impact for employers. Where an employee does not defer the State Pension but keeps working after aged 66, the employer PRSI contribution rate is capped at 0.50% (Class J0) while there are no employee PRSI deductions. From 2024, where an employee defers receipt and continues to work, the PRSI contribution rate remains at Class A (currently 4% for employees and 11.05% for employers, increasing from 1 October 20242). Class A rate applies while the employee is working until the earlier of the date of the award of the State Pension (Contributory) or the employee has turned 70.
Feedback from employers on the first six months of the regime is that the number of employees choosing to defer their State Pension has not been large to date, however some gaps in processes have led to payroll corrections being required.