EU coordination rules ensure contributions paid in different EU countries are not lost. Under the current Brexit negotiation agreement, signed by both the European Commission and the UK Government on 8 December, this will remain the case for both UK and EU citizens residing in the EU prior to the Withdrawal date of 29 March, 2019.
If you have worked in several EU countries, including Italy and the UK, you may have accumulated state pension rights in each country. When the time comes for you to claim your old age pension, you normally have to apply in the country where you are living or in the country where you last worked. That country is then responsible for processing your claim and bringing together records of your pension contributions from all the countries you have lived in.
If you have never worked in the country where you now live, you should apply to the relevant authority in the last country where you worked. Your application will then be processed there.
In Italy, if you made your first contribution before 31 December 1995, you need to have made 20 years of contributions to INPS (the Italian social security system) in order to qualify for an old age pension. The Italian retirement age is currently 66 years and 7 months for both men and women rising to 67 years from 1 January 2019. Further adjustments to the retirement age can be made every 2 years and are likely to be in an upward direction given the continuous increase in Italian life expectancy!
If your first INPS contribution was made after 31 December 1995 then you can still qualify for an old age pension after 20 years of contributions as long as it is worth at least 1.5 times the minimum Italian social pension of 448 Euros a month. However, if you have made at least 5 years of contributions in Italy, you will still be eligible for an old age pension at the age of 70 years and 7 months, rising to 71 years from 1 January 2019.
In the UK, to be eligible for the maximum state pension of £159.55 a week, you require 35 years of National Insurance contributions and usually at least 10 years of contributions to qualify for any state pension. If you have not worked for 20 years in Italy but have previously worked in other EU countries and made contributions, then INPS will contact the relevant authorities in order to acquire your contribution history and ascertain your eligibility for an Italian pension based on the EU “principle of aggregation of periods”.
INPS will then be responsible for processing your claim and bringing together previous records for all your EU contributions (including UK National Insurance ones).
It is up to each EU country’s social security system to calculate the part of your pension it should pay. Eligibility is evaluated by taking into account all contribution periods completed in all EU countries. To calculate your pension, each national system will add together the periods you completed in all EU countries in order to establish how much pension you would have received had you contributed into its own scheme over the entire time (called the “theoretical amount”). This “theoretical amount” will then be adjusted to reflect the actual time you were covered in that country (called the pro-rata benefit).
Each individual EU country is then responsible for paying you a pro rata pension if you have satisfied its eligibility criteria.
Finally, if you meet the conditions for entitlement to a national pension irrespective of any periods completed in other countries, the pension authority can also calculate the national pension (known as independent benefit). The national authority can then compare the pro-rata benefit and the independent benefit; you will receive whichever is higher from that EU country.
We would strongly recommend you review all your existing pension arrangements and how to deal with any shortfalls. For a no obligation free of charge consultancy please contact us at: https://www.britishinitaly.com/contact-us/
Tel 06 45429867
John Douglas Stewart,
Head of Business Development