Returning Emigrants

Pension shake-up may hit returning emigrants hardest

Ireland's Ambassador to Australia Breandán Ó'Caollaí

Ireland's Ambassador to Australia Breandán Ó'Caollaí

IRELAND’S Ambassador to Australia has played down concerns that returning emigrants could be worse off by proposed Irish pension reforms, saying most people’s entitlements would be largely the same.

Breandán Ó Caollaí said the proposed overhaul of how a person’s State pension is calculated (see below) would be “a fairer approach for all.”

One of the more controversial proposals is that a person may need to make 40 years of social security contributions to claim the full State pension. This is in contrast to the current system where someone could qualify for a full pension based on just 10 years’ payments, provided they had no gaps in their employment record.

Mr Ó Caollaí said this scenario was “quite rare” and “an anomaly”. 

The example given in the Government’s consultation paper is of someone who worked in the UK between the ages of 17 and 52 and worked up to a full UK pension, then moved to Ireland and worked for 13 years before retirement. Under the current system, they would also get a 100 per cent Irish pension on top of their British one.

It is in contrast to other scenarios in the consultation paper of people who worked for much longer but got a smaller pension. 

One is a woman who worked from the ages of 17-20 and then cared for children for 20 years. She went back to work for another 22 years but would only receive an 85 per cent pension under the averaging system.

Under the new way of calculating pensions, the person in the first scenario would only get a 33 per cent pension while the second person would get 100 per cent. 

While these scenarios had very different outcomes under the old and new systems, Mr Ó Caollaí said that people with "normal emigration patterns" would have mostly similar entitlements.

“Most people can claim pensions from both jurisdictions they worked under, and receive two pensions,” he said. “While both pensions might be at a reduced rate, their combined payment will quite possibly be greater than a single pension.” 

Emigrants returning to live in Ireland may be disadvantaged by new rules for state pensions.

Emigrants returning to live in Ireland may be disadvantaged by new rules for state pensions.

People who worked in Australia also have the option of claiming a pro-rata pension under the Irish Australian Social Security Agreement if this is more beneficial to them.

Under the agreement, periods of working life in Australia are treated by Ireland as periods of insurance, and vice versa. These periods are added together to meet the minimum periods required for the pensions offered by each country.

Ashley Johnston of the Irish Welfare Centre in Sydney said they could direct people of pension age to the appropriate social welfare service “to receive sound and comprehensive
advice regarding their entitlements and pension queries.”

The proposals are explained in a consultation paper, on which interested Irish citizens can give feedback on until September 3, 2018. To make a submission go to www.welfare.ie and clicking ‘consultations’. 

How are Irish State pensions currently calculated?

State pensions are currently calculated using the yearly average approach. Your total number of social security contributions is divided by the number of years between first starting work and the last full year before retirement. A yearly average of 48 is required for a full pension. This method penalises those with big gaps in their employment record, eg for child-rearing. Under the proposed reform, pensions would be calculated using the Total Contributions Approach (TCA). Pensions would be based on the total number of Social Security Contributions a person made. Controversially, as many as 40 years of contributions could be needed to get a full State pension, although the Government stresses the number of years has not been decided yet. People who left the workforce to care for children will receive credited contributions that will count towards their pension entitlement.

Is applying for a pro-rata pension under the Social Security Agreement between Ireland and Australia a separate application process? Do you choose one or the other?

No, you apply for the State pension in the ordinary way. The application form requests (among other things) details of any employment abroad. When assessing your claim, the official will first see if you can qualify for a full rate pension in the normal way. If you do, there is no need to check overseas contribution records etc. If you do not, he or she will then go through a number of checks to see what method of qualification will give you the highest possible payment. If you have indicated you have a foreign employment record, this will be one of the options considered.

Answers supplied by the Department of Foreign Affairs.

From Sydney's beaches to my Longford farm

John Connell is a returned emigrant, writer and award-winning journalist.

John Connell is a returned emigrant, writer and award-winning journalist.

It’s a cool April morning after what has been one of the worst winters in Ireland in living memory. I am sitting down to my computer after morning jobs on the farm and reflecting back on my years as an emigrant. 

Outside my window the gentle waters of Lough Gowna lap and for a brief moment I am transfixed, transported back to Sydney Harbour and gentle days spent there.

I am a farmer and writer now where once I was a journalist and producer in Sydney. I have left that old life behind me but there is a part of me that will forever be Australian.

I came to Australia as a journalism student aged 20 on an exchange program. That move was to define the rest of my life, for six months soon turned into five years and I found myself an accidental Aussie.

I was not alone in that move. Many Irish – indeed, many friends and neighbours – made that same voyage in the years after the recession and worked in the mines and building sites around and throughout the great southern nation.

Sydney was everything Dublin and Longford were not. It was beautiful, and sunny, multicultural and full of opportunities and employment. 

It was in Sydney that I became a writer and a journalist. Putting pen to paper for the first time as a homesick 20-year-old, I wrote my first short story, The Little Black, about a downer cow. The story was to go on to give me my first book deal at the tender age of 23.   It was here too that I met my mentor, the writer David Malouf, who has had a lasting impact on me and helped me become the writer and man I am.

The Australian mentality of the fair go was something new and different to me. Here people judged you not on who you knew, but what you knew and merit was rewarded in a way that Ireland never has quite managed.

I worked for SBS and the ABC before starting my own production company. These were golden years for me; I made friends in both the Australian and the Irish community, including the wonderful and now departed journalist Seumas Phelan. Employment and opportunities, aside Australia was where I met my wife Vivian and so it is forever a joy-filled place for me, a place of grá.

My time in the southern land came to an end a few years ago after a number of health problems forced me home. Those first months in Ireland were not easy ones but they have laid the foundation for my new life here.

Returning to Ireland has been a huge shift. I have lived here now for the last three years and in that time have begun to understand my nation anew. 

There is a beauty and wonder to this place that I see now in ways that I had missed as a child. I had to leave this land in order to appreciate it.

I began farming once again after years as a journalist and the work, while at first hard, proved rewarding. I swapped an office and computer for fields and a tractor. 

I took a great joy in working with my body again and a whole hidden Ireland began to open up to me once more, a world of neighbours and ceilís, of marts and bachelors, local football matches and village fairs.

There were times I missed a nice flat white and a walk by Rushcutters Bay but there is something about bringing a new calf into this world in the middle of a cold Irish winter’s night that no city can ever replicate. 

One has to be active in rural Ireland to feel a part of the community but I have found the rural people of my youth so welcoming and open, for they too have been emigrants and they too know what it is to return.

Australia is where I spent my formative years but Ireland was always calling me home – and it did, eventually.

I’ll forever be an Aussie Irish man, and I’m the better for it.

John Connell, who now lives and works in rural Longford, is a Walkley-winning journalist, farmer and writer. His memoir, The Cow Book, is published this month in Australia by Allen & Unwin.