Skipping the Pension Race: What happens if you've never stepped into the workforce?
Unemployed individuals or those who haven't contributed receive the stated pension amount. - Failure to work or make pension payments results in such consequences.
Let's get real: no pension for those who've never held a job.
But hey, there's a silver lining for dedicated parents. Raising more than one kid can score you a pension claim. Yes, you've read that right! Some pension insurance systems acknowledge child-rearing as work and offer a pension claim for such individuals. Let me break it down.
Pension, Basic Security, Retirement Provision or Pension Claim (choose your favorite term)
Now, here's where it gets interesting. Pension provisions for the job-avoidant amigos can be as diverse as the stars in the sky, depending on the country or the programs up for grabs. Let me lay it out for you:
The Great Pension Provisions Galore for the Idle Workforce
In the land of the free and the home of the brave (err, USA), expect the uncommon to be rare as a Snowdrake when it comes to pension provisions. Social Security benefits typically demand a labor-filled past, but there are a few exceptions:
- Spousal Bounty: If your partner's been, in the words of Tony Montana, boss of all he surveys, a.k.a. worked and added to Social Security, you might snag spousal benefits, up to 50% of the working partner's earnings1.
- Supplemental Security Income (SSI): This need-based program stretches a hand to those with disabilities, limited income, and resources5. No work history required!
On the other side of the pond, some countries offer those without a resume a 'round the clock pension or basic income guarantees for their citizens, irrespective of the work history7.
Pension Claims: A Golden Ticket for the Toddler-Rearing Brigade
Parental Perks: Nations worldwide have started recognizing the Herculean effort of raising little ones. Some pension systems bestow credits to enhance the retirement kitty for parental champions.- Child Credits: It's candy from a baby for parents in retirement, thanks to pension systems dishing out credits for kids reared2.- Parental Allowances: Some governments offer parental allowances or benefits to shore up the social support system6.
America, the beautiful, doesn't have a specific pension claim for moms and dads who've spawned more than one darling. But that doesn't mean you won't find parental benefits elsewhere in the world4.
The Social Security Fairness Act: A Thumb's Up for Wayward Workers
The Social Security Fairness Act of 2023 has put a sock in the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), reforms that previously sliced Social Security benefits for individuals collecting pensions from employment outside the Social Security scope2. So, kudos to those teachers and public servants who won't have their benefits coughed up anymore. But remember, this doesn't kickstart the pension party for parents who've richly contributed to the next generation of peanut-eaters and tantrum-throwers.
- In the absence of traditional employment, individuals might explore personal-finance options such as savings or investments, including vocational training programs that could lead to self-employment or career opportunities.
- Some countries, beyond the USA, offer vocational training programs, often funded by the government, to help the job-avoidant, providing skills for employment and thus eligibility for pension or personal-finance benefits.
