As of 1 January 2024, noteworthy changes to Pay Related Social Insurance (PRSI) will come into effect. These changes are designed to allow individuals the flexibility to draw down their State Pension (Contributory) between the ages of 66 and 70. This will provide them the opportunity to continue working, and contributing to PRSI, as well as to potentially improve their contribution record.

Exemption Age Limit

Currently, employees aged 66 or over, as well as self-employed individuals aged 66 or over, are exempt from paying PRSI on their income. However, as of 1 January 2024, the upper age limit for PRSI exemption will be extended from age 66 to age 70. This change will apply to employees, employers and self-employed individuals.

Changes

Employees who turn 66 after 1 January 2024 will continue to be liable for PRSI until they are awarded the State Pension (Contributory), or until they reach the age of 70. Employees who are awarded the State Pension (Contributory) and who continue to work should inform their employer to cease PRSI payments (PRSI Class J will apply).

Exceptions

The following exceptions apply to the changes:

1. Individuals already awarded the State Pension (Contributory).
2. Individuals who have already reached 66 years of age by 1 January 2024 (i.e., they were born before 1 January 1958); their PRSI position will remain unaffected by these changes.

Importance of Correct PRSI Class

It is crucial for employers to accurately report the PRSI class, as an incorrect return could lead to:

• Overpayment or underpayment of PRSI by both the employee and employer.
• Issues for contributors in claiming their social insurance entitlements.

To set or edit the PRSI Class of an employee on SimplePay, navigate to the employee’s Basic Info page, and select the appropriate option from the PRSI Class dropdown. 

For more information on how to cater for these changes on SimplePay, please visit our help page here.

We trust that this information will prove useful to you. If you have any questions, please feel free to get in touch with our Support team at support@simplepay.ie.

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Take care,

Team SimplePay