Border People provides case studies and frequently asked questions (FAQs) illustrating the dilemmas facing people who cross the border and suggest ways to resolve these.
These are real genuine problems identified by users of the website coupled with advice from staff of the Borderwise project, a cross-border initiative developed in partnership between Citizens Advice (Northern Ireland) and Citizens Information Board (Ireland).
Q: I work in Donegal and live in NI. I have been paying Tax and PRSI in the south. I got a letter from the NI revenue to say that I haven't paid enough contributions to uphold my pension in the north. They say I owe about £5000. Do I have to pay Tax and NI contributions in Northern Ireland too?
A: As a UK resident with earnings that arise outside of the UK you are obliged to complete a return of that income to Revenue in the north under self-assessment rules. You should be given a credit or relief in respect of any Irish income tax you are paying because of the double taxation agreement between the Republic and the UK. There may or may not be a balance of income tax to pay to HM Revenue in the north. You do not have to pay national insurance contributions in north but you may wish to pay voluntary contributions in the future to enhance the rate of any UK Retirement Pension you may be entitled to.
However, you should be aware that the number of years for which a person needs to have paid national insurance contributions in order to get a full basic UK state pension is to be reduced to 30 qualifying years for both men and women reaching state pension age on or after 6 April 2010. This may affect any future decision you make in relation to voluntary contributions. Should you continue to pay PRSI you may well qualify for an Irish State Pension at age 65 or 66. You cannot actually transfer your contributions from the south to the north but under EU Social Security rules your contributions in one jurisdiction may serve to increase the rate of the State Pension you receive in the other jurisdiction. [July 2008]
Q: I have lived and worked on both sides of the border at various times during my working life. At all times I was a PAYE worker and made the normal National Insurance and PRSI contributions. I am currently living in the South and working in the North. When I retire in 4 years time will I receive a full pension from RoI or will I receive a part pension from NI and part from RoI? Is there anything I can or should be doing now to ensure that my full pension rights are protected?
A: You generally need to have paid National Insurance for 30 qualifying years in order to receive a full NI/UK Retirement Pension when, as in your case, you reach the retirement age of 65 on or after 06 April 2010.
You can get a UK pension forecast by contacting:
HM Revenue
Centre for Non-Residents
Longbenton
Newcastle Upon Tyne
Helpline +44 (0)191 203 7010
Your PRSI contributions may help to enhance the rate of your NI/UK pension because of EU social security rules.
You need 520 PRSI contributions together with a yearly average of at least 10 PRSI contributions to get an Irish State Pension at age 66. You can get an Irish State Pension forecast by contacting Social Welfare Pensions in Sligo, phone 1890 500 000. Again under EU rules your National Insurance may help to enhance the rate of your Irish State Pension or indeed allow you to receive some rate of the Irish Transition State Pension which is paid at age 65. [July 2008]
Q: Is tax deducted at source from UK pensions? I am a pensioner resident in the RoI and I have income less than the RoI exemption limit. Can I claim back the tax deducted by the UK?
A: Generally, a UK occupational or state pension remains subject to UK income tax even if the recipient is no longer resident in the UK. However, this is not the case for all UK occupational pensions and I would suggest you contact HM Revenue to clarify this.
HM Revenue
Centre for Non-Residents
Longbenton
Newcastle Upon Tyne
Helpline +44 (0)191 203 7010
Persons aged 65 or over have a personal allowance of £9030 for the UK tax year April 08 to April 09 so that you should not be paying UK income tax unless the total of his UK income exceeds that figure in that period. You cannot claim a rebate of UK income tax from Irish Revenue. The double taxation agreement between the two countries would allow Irish Revenue to reduce any Irish income tax liability by the amount of UK income tax paid; but as your income is below the Irish exemption limit there is no Irish tax liability and this relief has no application. [July 2008]
Q: I live in the North and have been working in the Republic since 2000 - will the contributions I have made be recognised when I claim State Pension in Northern Ireland when I retire?
A: Under EU social security rules each member state in which you have worked should first calculate the pension you are entitled to under its own legislation. Then a pro rata entitlement is considered on the basis that all your social insurance has been in that member state. This means that your PRSI from the Republic could serve to enhance the rate of your NI/UK state pension if your national insurance record does not of itself allow you to get a full NI state pension. The reverse is also the case so that you PRSI combined with national insurance may enable you to qualify for some rate of an Irish state pension. The standard age for a contributory Irish state pension is 66, a transitional pension with more stringent contribution rules is payable from age 65.[June 2008]
Q: I am in receipt of invalidity pension from Ireland and receive no benefits package with living abroad. I have recently thought about trying to return to work but have been informed that exemptions and back to work allowance are not now considered for people living in England. What is the alternative for people who are unable to get full-time employment because of ill health but would like to try to return to work in some part-time capacity but cannot afford to give up benefits because they have no other income?
A: Back to Work Allowance is only payable to residents of the Republic of Ireland. However, you can apply for rehabilitive work exemption which if granted will allow you to work part-time and keep your Invalidity Pension. You can get an application form for the work exemption from the department in Longford, phone +353 (0)43 45211. You will also need medical evidence confirming that the work is in the nature of rehabilitation or occupational therapy.[May 2008]
Q: I had to take early retirement in August 2007, due to ill-health, after working in the UK. However, I now have a very small occupational pension on which I pay UK Tax. Should I be paying Tax in Ireland as well? It is £7,000 per year.
A: As you are resident in the Republic you are potentially liable for income tax there, no matter where your income arises. You should declare your UK income to Irish Revenue. There is a double taxation agreement between the Republic and the UK which obliges Irish Revenue to give you a credit or relief in respect of any UK tax you pay on your occupational pension. For how Irish income tax operates please see www.citizensinformation.ie.[June 2008]
Q: My husband and I have lived and worked in Northern.Ireland all our lives (we are now both late 50's) and are considering moving to permanent residency in Co.Donegal. How will this affect our health NHS and Pension (all paid into UK Fund)?
A: If you move to Donegal and are still working in NI you will continue to be entitled to the same routine NHS treatment. When you retire this would generally not be the case. As a cross-border worker or 'frontier worker' resident in Donegal you would also be entitled to an Irish medical card from the Health Service Executive in Ireland. This would entitle you to free public healthcare in Donegal and you should be able to retain the card when you retire on the basis of having a UK Retirement Pension, although automatic entitlement to an Irish medical card kicks in at age 70.
When resident in Ireland you are obliged to declare your NI income to Irish Revenue under self-assessment rules. If your only income is your earnings from NI there should be no additional tax liability to Irish Revenue. Please contact your pension provider to clarify if a change in residence has any impact on your pension contributions or entitlements.[May 2008]
Q: I'm resident in Northern Ireland but have been working in Ireland for almost 10 years. How does this affect my state pension? Am I eligible for a state pension in NI or Ireland?
A: Depending on the number of years you have worked in NI and Ireland you may qualify for a State Pension from either the UK, Ireland, or both. European social security rules allow contributions made in different member states to be combined on a pro rata basis so that contributions in Ireland could enhance the rate of a NI pension and vice versa.[May 2008]
Q: I am an employee of the HSE in Ireland (since 2001) having previously been an employee of a Health Trust in Northern Ireland (NI) (from 1989 to 2001). Is it possible to have pension entitlements aligned from North to South or vice versa?
A: Under European social security legislation each 'member state' in which you have worked and paid social insurance (in your case the Republic and the UK) must first consider your entitlement to a State Pension soley on your contributions in that country. They must then go on to consider your entitlement to an EU pro rata pension on the basis of a combination of your social insurance in both countries.
To qualify for an Irish State Pension solely on your PRSI you will need 10 years (520) paid contributions and a yearly average of at least 10 contributions for the State Pension Contributory (paid at age 66). A higher yearly average of at least 24 is needed for the State Pension Transition (paid at age 65). You are aged 45 and if you remained with the HSE (or another employer in Ireland) even until your late 50s you should qualify for the Irish State Pension. Your NI contributions should allow you to get some rate of a UK Retirement Pension and the same EU pro rata rules apply to that pension.[May 2008]
© Northern Ireland Association of Citizens Advice Bureaux (NIACAB) 2008
