IB and pension

marshmallowbaby

My sister has been on IB for several years now and her health is so bad we don't ever forsee her being able to work again.
She's worried however as she had worked for many years for a local authority body before taking ill and was on sick leave..then onto incapacity as it was then. After about a year her work pensioned her off, and she recieved has monthly ill health retiral pension of some £400 ever since.
She is still on IB though her intention has always been to work again, and its a goal she aims for despite her condition. I suppose as it gives her some hope of having a 'normal' life in the future.
She has filled in whatever forms have been sent to her as they have come in..last one was about 14 months and unlike other ones that said they would review her in 12 or 24 months the last one never gave any time limit before her next review..just that they MAy review her again sometime in the future or words to that effect.
She's got herself worked into a terrible state because some one told her she can't have IB when on a pension. She'd like most people stuggle more than she already does without the benefit and no prosepct of working, but she seems to be more upset at the thought that she may have unwittingly 'defrauded' the governement. Shes such an honest person this is tearing her apart.
She's terrified to contact the office incase they 'jail' her and when she was retired she had filled in so many forms and spoken to advisers at the Dhss as was, she sure they were aware, but then she was so ill at the time she can't remember half of the forms she's had to fill in over the years, and each one is a struggle in itself.
Can anyone advise as to the situation so I can go over it with her and we can get this sorted out.

CIS

She can receive IB and get an occupational pension, BUT, the IB is means testted against the Occupational Pension on a £ by £ basis. If she gets over £82 pension, she'll get no IB.

On a positive note though, she should still claim IB as she will get an underlying entitlement to IB (entitlement but no money paid). This means that she will get credits towards her State Pension and some Additional State Pension for each complete tax year that she gets IB

CIS

Just reading it again, on £400 per month, that should take her above the IB level by around £10-£15 per week.

Its probably best for her to ring up IB and speak to them now, rather than letting it drag and worrying about it, it may turn out okay.

healy

Some of the information given is incorrect.

The new rules for means testing pensions came in in April 2001, if she received her pension before that date she will NOT be affected.

Also there is a 50 pence in the pound reduction for pensions over £85 so she would still receive quite alot of IB if she received her pension after 2001.

marshmallowbaby

Gosh she fell apart when she read that and I'm actually scared to leave her incase she does something daft!
I had hoped the person who told her that was just being nasty as I understood IB not to be a means tested benefit.
Has this always been the case with the pension or is the a new thing?
She's been receiving IB for several years and is now terrifed about how they would intend to claw the money back..must be somewhere in the region of £3300 over the years!
It was an honest thing on her part she's not someone who steals from anyone!

marshmallowbaby

Oh healy I'm sorry I hadn't seen your response when I posted there..ohh I do hope so...I so worried about her now....
there is no way she can work and stress accelerates her condition...I've told her I'll contact the dss for her and we'll go through it all together but if I can give her any sense of ease I'd be most grateful!

marshmallowbaby

Just to confirm the imfo..I checked and she has been on IB since 1992 and was medically retired in late 1992/1993..so this means she isn't means tested?

healy

No she is not means tested on her pension and she has nothing to worry about.

marshmallowbaby

Thank you SOOO much...you have NO idea how much of a weight this is off her mind..
she already had herself clamped in irons standing in a dock ..and I wa spretty certain she would be ther etoo lol..
Many thanks again...

Ted_Hutchinson

marshmallowbaby wrote:

Just to confirm the imfo..I checked and she has been on IB since 1992 and was medically retired in late 1992/1993..so this means she isn't means tested?

She should also check that she shouldn't be paying tax on her Incapacity Benefit. If she was getting invalidity benefit before 12th April 1995 then her IB isn't taxable, it easy for this to be overlooked. If she has paid tax on her IB then she should be able to get her local office to confirm that the IB claim is continuous from 12.04.95 and therefore protected. She will then have to send this letter to the tax office and she should get a very nice cheque back plus a nominal amount for loss of interest.

marshmallowbaby

Thank you Ted..I'll confirm that tomorrow.
She has no idea if she pays tax or not on it although I do know she pays about £2 or £3 tax on the pension a month.
I would like to say again a heartfelt thank you to everyone who responded to this.
The situation has been quickly turned around from sheer desperation and worry ( I really was scared Sarah migh do something silly), to her sitting on the sofa crying tears of sheer relief.
Its been such a weight lifted from ALL our shoulders.
Many many thanks.