Will my pension be lower because of PRSI mistake?

Q&A: I am alarmed by the report last week that some people in the public service may lose out on part of their pension entitlements because of a mistake in paying PRSI. How is this so?

I took up a temporary job as a teacher in the early 1990s and was later made permanent in the same school. Am I likely to be affected? How can I find out and what can I do if I am?

– Ms SH, Sligo

YOU’RE QUITE right to be alarmed. It seems to strain credibility that whole sections of the public service could have misapplied PRSI contributions and never realised the error.

What essentially happened is that people in temporary posts pay PRSI at a higher rate than people in full-time employment in the public service. The other side of the equation is that pension contributions were different for part-time or temporary post-holders.

Naturally, when a person is made permanent, the new lower PRSI rates should be applied.

While this would certainly happen where the permanent position was with a different school or department, it appears that in a number of cases where the person secured permanent employment in the job previously held temporarily, this did not happen.

Quite why no-one in the Department of Education and elsewhere – we are told there are certainly cases in some of the commercial semi-State bodies – is unclear.

You would have thought someone would have tumbled to the excessive number of “temporary” employees and, equally, the lower than budgeted for number of permanent staff.

The people affected are those who were in temporary position before 1995 and then became permanent after that date.

It’s not clear how many people are involved, despite the alarm raised by pensions ombudsman Paul Kenny.

If you are in any doubt, you should immediately contact the Department of Education (obviously the same applies to those in other public service employments with their own department or semi-state groups).

The biggest problem is that, having effectively underpaid pension contributions, people in this position face the prospect of having to pay more over the coming years to compensate. Even worse, those already retired face the prospect of lower pensions.

While the wrongly applied, higher PRSI payments will be refunded – confusingly by the Department of Social Protection rather than your own employer – claims for PRSI refunds can only go back four years. That is likely to leave many people out of pocket on both sides of the equation.

Several complaints have already been made to the pensions ombudsman and, if you find you are one of those affected, and are out of pocket as a result, I would certainly suggest you contact his office.

Escaping a French property quagmire

I bought a property in France on a 50/50 basis with a friend who sadly died in 1993. Since then I have tried everything to sell this property but his remaining family ignore all my requests and, due to French law, I am stuck in limbo and unable to sell. The property is a café/bar but has been closed and unoccupied for over 10 years. Recently I have received requests for payments which I cannot afford and I don’t know what to do and am wondering why I am now getting bills after being ignored for at least five years or more.

As his family remain intent to ignore me, is there a time limit whereby after, say 25 years, the property comes to me? I realise this is an unusual request and you may not have the answers for me but any information would be greatly appreciated.

– Mr AA, Dublin

YOU ARE IN a very complex situation and it is impossible to give any detailed information on the basis of the sketchy details provided. In my experience, there is nothing more intractable than property disputes and cross-border disputes are worse.

What I can say is that this case has long reached the point where formal legal engagement is required. I am certainly not aware of any measure that would allow you to claim ownership of an asset after a set period of time in dispute. It would make little sense as, clearly, both sides could trigger such a provision.

It is possible to approach a court after a certain time in the case of a person missing, presumed dead, after a certain period to have them formally declared deceased and thus triggering the bequeathing of assets. However, that does not apply in this case as it would appear the assets have already been formally passed on to family members of your partner in this enterprise.

An important question is whether any legal process should be in Ireland or in France. I have a troubling suspicion that the original deal with your friend was a distinctly informal arrangement for which there will be very little if any paperwork. That’s a problem because you are essentially in a contract dispute.

Neither side seems to challenge the fact that title to this business premises is shared between the parties. The point at issue is what any contract provided for in terms of dissolution of the partnership. If there is no formal contract, this could be very hard to determine … and almost certainly expensive.

Regardless of the original dispute, it is certainly unusual and alarming that you would now be receiving demands for payment after a gap of several years and this is a matter that should separately be taken up with your Irish legal advisors in the first instance.

This column is a reader service and is not intended to replace professional advice. Please send your questions to QA, c/o Dominic Coyle, The Irish Times,24-28 Tara Street, Dublin 2, or to dcoyle@irishtimes.com. No personal correspondence will be entered into.