From 1 July 2018, pensioners working on an agreement can claim a tax credit. This exemption applies to pensioners who receive an old-age pension, early retirement pension, invalidity pension, retirement pension after retirement age or invalidity pension. It applies to work under a work performance agreement or a work activity agreement. This article provides details of how pensioners can claim this relief.

How does levy relief work?

A pensioner may designate one agreement from which he or she will not pay pension insurance premiums if his or her income from that agreement does not exceed EUR 200 per month. However, if the income exceeds that amount, the pensioner shall pay pension insurance premiums only on the difference between the income received and the amount of EUR 200. For all other agreements, he shall pay the pension insurance premiums.

How does a pensioner claim the exemption?

The pensioner-agent must inform his/her employer in writing of the application of the exemption as well as of its termination. He or she must also declare on oath that he or she is not claiming the exemption with another employer in the same calendar month. For this purpose, the form “Notification and Affidavit (Levy Relief – EMPLOYEES)” is available on the website of the Social Insurance Institution.

What’s new for early retirement pension recipients?

From 1 July 2018 early retirement pension recipients can work on an exempted agreement without the Social Insurance Institution stopping their pension payments. However, if their income from this arrangement exceeds EUR 2 400 per calendar year, the Social Insurance Institution will stop paying the early retirement pension. It will resume payment of the pension and settle it in the following calendar year. In order for the pension to be paid, the condition that the pension recipient is not insured for a pension from other gainful activity must also be met. As a pensioner, you have the opportunity to reduce your insurance expenses. For clarity and support in claiming these benefits, please contact the Social Insurance Office, which will provide you with all the necessary information and forms. You can contact them on freephone 0800 123 123, via the Enquiry Form on their website, or in person at their branches.