Handbook for Self-employed Persons - National Insurance Scheme

12The new basis computation is as follows:Contribution weeks­1,100 weeks (22 years)Annual average (best 5 years) ­$35,5002% for each year for first 20 years and 1 ¼ % for all subsequent years.­20 x 2% x $35,500 = $14,200­2 x 1 ¼ % x $35,500 = $887.50Total annual pension ­= $14,200 + $887.50­= $15,087.50Weekly Pension ­= $15,087.50/52 = $290.14The 50/50 basis is as follows:½ of the “Old Basis” total + ½ of the “New Basis” total½ of $355 + ½ of $290.14= $177.50 + $145.07= $322.57Early & Late PensionThe examples shown above are the calculations for a person who would receive his/her pensionat the pensionable age (66). The two examples below show the computation if this same personwere to take either early or late pension.Adjustment for early pension:In order to qualify for an early pension one must have actually retired from employment. It shouldalso be noted that a person qualifying for the minimum pension would not be allowed to claim anearly retirement pension, as that would reduce the payment below the minimum standard.In the first example above, the resulting pension payable at pensionable age was $355 per week.If a pensioner opted for early retirement pension at age 64 years 3 months, the following wouldapply:Age at effective claiming date­ ­= 64 years 3 monthsNo. of months early­= 21 monthsReduction factor ­= 21 months x 0.5% per month = 10.5%Pension deduction ­= $355 x 10.5% = $37.28Net weekly pension ­= $355.00 - $37.28= $317.72