Full Age Pension
What is it?
A full age pension is payment to an insured person who is between the ages of 60 and 65 and who has paid or been credited with more than 500 contributions. NIS provides three types of pensions. The age pension is one of these three. The normal pension age will increase gradually from 60 to 65, over a 15 year period as follows:
|Time period||Age at which you receive pension|
|2014 to 2015||60|
|2016 to 2018||61|
|2019 to 2021||62|
|2022 to 2024||63|
|2025 to 2027||64|
|2028 and onwards||65|
|Year of birth||Pensionable age|
|1955 and before||60|
|1956 – 1957||61|
|1958 – 1959||62|
|1960 – 1961||63|
|1962 – 1963||64|
|1964 and after||65|
How Can You be Disqualified?
Being imprisoned will result in termination of pension but the Board has discrentionary powers to pay one half of such pension to the dependents of the imprisoned age pensioner.
Early Age Pension
What is it?
An individual may receive his/her pension as early as age 60. However, the pension would be reduced by 6% for each year you retire before the normal pensionable age.
If your pensionable age is 65 and you retire at 64, your pension will be reduced by 6% (12*0.5%). This is because you retire 12 months before pensionable age.
Weeks Required For Full Pension Eligibility
The minimum required weeks of contribution will gradually increase from 500 weeks (10 years) to 750 weeks (15 years) as follows:
|Time period||Minimum required weeks|
|2014 to 2015||500|
|2016 to 2018||550|
|2019 to 2021||600|
|2022 to 2024||650|
|2025 to 2027||700|
|2028 and onwards||750|
An example of a current Pension calculation
Best 5 years salary over career/5 = Average Annual Insurable Earnings
Weekly rate = Average Annual Insurable x (30 to 60%)/No. of weeks in the year
Monthly pension = Weekly rate x no. of weeks in the month
|YEARS||ANNUAL SALARY||WEEKLY CONTRIBUTIONS|
Weekly pension = $108.00 (to the nearest multiple of 10)Best 5 years = $18,720 + $18,720 + $18,720 + $18,720 + $18,720
Average = $93,600/5 = $18,720
Weekly Pension at 30% = $18,720/52 x 30% = $108
Monthly pension = $108.00 x 4 = $432.00
Please note the following:
- The current minimum weekly rate of a pension is $70.00.
- A pension is currently calculated on the best five years.
- A full pension starts from 30 to 60%.
- This rate is increased by 1% for every 50 contribution weeks over the minimum qualifying weeks.
- The insurable earnings limit is $4,333 monthly thus the maximum salary that qualifies for pension is $4,333 per month or $1,000 per week.
- A claim for age pension should be submitted within three (3) months of the claimant’s retirement age.
- A pension is paid in multiples of the nearest ten cents.
Reduced Age pension
What is it?
Insured persons can qualify for a reduced pension between 2016 and 2027. The conditions for qualification:
- Insured person must attain pensionable age.
- Paid or credited at least with 500 weekly contributions but less than the minimum qualifying weekly contribution.
The reduced pension shall be the old age pension at the pensionable age multiplied by the weekly contribution paid or credited and divided by the applicable qualifying number of weekly pensions in that year.
A person who attained the pensionable age of 63 in 2022 but has only 550 contributions would receive a pension that is proportionately reduced:
550/650 x 30%x Average Wages.
650 is used because it’s the minimum qualifying weeks for a pension in 2022.
What is it?
If persons are not qualified for the Age Pension, then they can receive a lump sum payment called an Age Grant, if they have paid at least 50 weekly contributions. A lump sum of six (6) times the average weekly wages for each 50 weekly contributions will be paid.