Career Gap for a Homemaker – Pension Implications

Career Gap for a Homemaker – Pension Implications

Part of the earning power deficit between men and women can be due to women losing earnings as a result of time out of the workforce to raise children.  Women who choose to have a family are  by necessity required to take at least a minimal time-out from the workplace and in some cases this can last for a number of years, depending on personal circumstances.

Taking this break from paid employment can have implications in the long term when retirement age looms.  In Ireland, an individual can qualify for the State Pension at 66 if they started paying PRSI before the age of 56 and have made enough PRSI contributions to qualify.

Since September 2012, there have been measures put in place for those who previously did not qualify for the maximum rate of pension because of gaps in their PRSI contribution records.  See below:

This applies to those who spent time out of the workplace to raise a family or act as a carer, in a homemaker role. 

A homemaker is considered to be a woman (or man) who provides full-time care for a child under age 12 or an ill or disabled person aged 12 or over

Up to a maximum of 20 homemaking years (a year in which you are out of the workforce for the full tax year) can be disregarded for State Pension (Contributory) purposes.

You do not need to register if you:

  • Are getting Carer’s Allowance, Carer’s Benefit or the Carer’s Support Grant
  • Are getting Child Benefit and are providing the child(ren) with full-time care

You do not need to register because your claim for Child Benefit, Carer’s Allowance, Carer’s Benefit or the Carer’s Support Grant is treated as an application to be registered as a homemaker.

Registering as a homemaker

If the above does not apply to you, you should register before the end of the contribution year after the year in which you first become a homemaker. An application may be backdated if there is a delay in submitting the claim. To register fill out the Homemaker’s form (HM1) (pdf).Please note that only one person can be regarded as the homemaker in a household at any one time.

If you have any questions about this scheme, don’t hesitate to give us a call.