State pension not paid for first few days

david39

On May 6th I became eligible for my standard state retirment pension and am drawing it monthly directly into my bank.

I felt that I was short-changed in my first payment and when I queried it, I was told that I was not eligible for the first few days, between 6th May and 12th May.

I do not understand why this should be so, as I was also told that had I been on Benefits, I would have received the full amount.

When I queried it, the person on the phone at the Pension Deprtment was unable to give me an explanation that I could understand - is there anyone around who might know the true reason and can explain it to me - or am I being fobbed off????

dzug1

It's not some cack handed explanation of the following is it:

Benefit payment changes that start from April 2010

The changes also affect the payment of State Pensions. If you reach State Pension age on or after 6 April 2010 you will be paid in arrears on a day linked to your National Insurance number. This means you will be paid at the end of your pay week, not from the start. Your payday is the day you normally receive your payment (sometimes called your ‘pay week-ending day’).

david39

Yes - it seems you don't start qualifying for your pension on your birthday, but from up to a week later, depending on the last two numbers of your Nat Ins. No. (which, in turn, allocates the day of the week upon which your pension is paid)
You earn no state pension between your qualifying birth-day and the next occurrence of the weekday that is the same as your payday.
In my case - Birthday Wednesday, Payday Tuesday - six days with no pension. But, if I was on benefits, I could have had it paid!

I wonder who thought that rule up? Surely paying from the day you are 60 is easier to calculate and fairer!

millie

Even under the old rules before 6th April it was not paid from the date of your birthday, it was always the Monday following your birthday. My birthday fell on a Monday so I was lucky. My OH who was on Incapacity Benefit had his birthday on Tuesday and that was the day his benefit stopped so he had 6 days with no money. Nothing has really changed except everyone has to work longer to qualfy.

hansi

and don't forget that it's paid four-weekly. It really does make a difference, it doesn't seem any time between one payment and the next.

Mikeyorks

And ...... whilst we're doing the rounds ...... don't forget that it's taxed on an 'accrual' not a payment (like salary etc) basis.

Which is vaguely noticeable when you opt for payment in arrears - but particularly noticeable if your start date is within the 4 weeks preceding 5th April. As the first thing you will get is a Coding notice showing a coded out underpayment for the closing year ..... when you haven't been paid anything in that year!

In such cases - appeal the underpayment in the 1st year (it's only relevant then) under the provisions of para 2 of EIM74101. but do ensure you quote the following guidance - as most of HMRC seem oblivious of it :-

EIM74101 Pensioners are often content to pay income tax on the amount received in a year, as, in most years the amounts accruing and received are similar. However, it is possible in certain circumstances for the amounts to be different. If a taxpayer requests the statutory basis this should be accepted

dzug1

david39 wrote: »

!

I wonder who thought that rule up? Surely paying from the day you are 60 is easier to calculate and fairer!

Fairer maybe - easier to calculate, no as it would involve a part week