Means Testing Swizz?

foggytown

Am I the only one that thinks this is unfair?

I had to retire at 60 on health reasons.

I have two pensions avaiable from former employers. Combined they are less than £9000/year gross after opting to take a tax-free lump sum. (Considering the way things go these days I decided to grab everything I could up front.)

But taking the lump reduced my annual pension by only about £2,500/year. So, if I hadn't taken it my gross annual pension would have been about £11,500. I now find that calculation of eligibility for any possible benefits includes the lump sum as savings. If I hadn't taken it I would have qualified for some benefits even with the increased pension income that afforded. All I did was take from one pocket and put into another and I'm being penalised.

If lump sums are tax free then I also think they should be excluded from consideration when means testing for benefits. Or am I being unreasonable?

Regards to all,
FoggyTown

seven-day-weekend

I can understand how you feel but I did know that a pension lump sum would be counted as capital for means-tested benefits.

Looking at it another way, I suppose benefits are there to help those who have little or no money, not those who have a good few thousand in the bank.

I do sympathise....we would be in the same position if we lived in the UK. Income (Total) £9.5k but savings too much to qualify for any benefits.

Ted_Hutchinson

In this post #9 Scarlett1 posted a few of the items that MAY be thought reasonable that can be found at this link Identifying deprivation

For most people spending the money and then not getting your benefit and having to go to appeal and live without resources until your appeal is heard is pretty traumatic and not to be undertaken lightly.

You are not in that position as you are currently dammed anyway. So reducing your capital by making sensible purchases which would enhance your quality of life or provide security for the future may be worth the risk.

Providing you keep receipts for all the purchases and can show that your intention, when spending the money was not to enhance your pension credit claim but to
reduce or pay off a debt they owe
* purchase goods or services the Decision Maker considers reasonable, given their circumstances, eg
payments to reduce/pay off a debt, eg paying a credit card account or mortgage early
for day to day expenses
to improve their quality of life, eg buying a new kitchen or car
for medical treatment
for home repairs
for a holiday
possibly also to buy a funeral plan to ensure you have this settled before it is needed.

You would then be in a position to argue your case at appeal should there be any hassle from the Pension Credit people. I appreciate that these rules for deprivation come from the HB stable but usually they work on roughly the same premise when making decisions like this. Providing your purchases are reasonable given your circumstances then go for it.
Spending the lump sum on a day at the races wouldn't count as "reasonable given your circumstances" imo.