DWP benefits and pension freedom
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jamesd
Posts: 26,103 Forumite
The Department for Work and Pensions has provided guidance on how pension freedoms affect means tested benefits. The key rules are these.
For means tested benefits
These are Employment and Support Allowance (income-related), Housing Benefit, Income Support, Jobseeker’s Allowance (income-based), Pension Credit, Universal Credit:
If someone or their partner is under the minimum age for receiving Pension Credit:
For contribution-based benefits
For means tested benefits
These are Employment and Support Allowance (income-related), Housing Benefit, Income Support, Jobseeker’s Allowance (income-based), Pension Credit, Universal Credit:
If someone or their partner is under the minimum age for receiving Pension Credit:
1. The pension is ignored for benefit calculations if nothing is taken from it.
2. If money is taken out that money will count as income or capital depending on how regularly it is taken.
If Pension Credit age has been reached:2. If money is taken out that money will count as income or capital depending on how regularly it is taken.
3. You're expected to use the pension money to help to support yourself. Notional income equal to the amount than an annuity would pay will be assumed even if you have no income from the pension. If you take an actual income that amount of income will be used instead of the notional income. If you take a cash lump sum this will be treated as capital.
If pension money is given away, spent or transferred DWP will consider whether you did this to deliberately deprive yourself of income or capital and may treat it as though you still have it.For contribution-based benefits
4. For Employment and Support Allowance (contribution based), half of pension income over £85 a week will be taken into account when working out your entitlement. If you do not take your pension it will not affect this calculation and any lump sum that is taken to be capital will be ignored.
5. For Jobseeker's Allowance (contribution based), all pension income over £50 a week will be taken into account. If you do not take your pension it will not affect this calculation and any lump sum that is taken to be capital will be ignored.
Hopefully this'll be a useful reference for us and may stop me at least getting this wrong... 0
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