Annuity & Pension Credit

sam_yates

My Nan has an annuity that is paid to her care home each month, this payment goes straight to the care home and NOT to her at any point, this is to pay for her room in a residential home for the rest of her life. She has been receiving pension credits to top up her pension allowance for 5/6 years but suddenly Pension Credits have informed my Mum (who is her power of attorney) that she is not entitled to receive pension credits anymore due to the annuity, even though there is no ruling to say that under Pension Credit guidelines. My Mum's financial advisor has also stated that she should get the credit. This pension credit tops up my Nan's fees by £100 each month and without it my Nan may have to move to another residential home. Help she is 95!!!!! The Pension Credit people have been totally unhelpful and my Mum is tearing her hair out. I can't find anything to help us with an appeal so any advice would be great!

anmarj

this is the definiation of annuity, if it does not fall under home income plan or structured settlement then the income does get taken into account, and financial advisors are not always right. If your nan has an income from any source then it is taken into account as part of means testing. Very little income gets disregarded

from decisions maker guide

Annuity income
85170 An annuity is an annual income and should be taken fully into account1 except for the annuities listed at DMG 85171. The most common type of annuity involves a person paying a lump sum of money to an insurance company. In return the insurance company will pay an agreed sum of money at regular intervals each year until the death of the investor. 1 SPC Act 02, s 15(1)(d)
85171 The exceptions are
1.
Home income plans. These are schemes where an annuity is bought with a loan secured on the home. The income is subject to a partial disregard1 if certain conditions are satisfied (see DMG 85221 et seq).
2.
Structured settlements. This is where compensation relating to a personal injury award is used to buy an annuity for the injured person. The income is fully disregarded for SPC purposes, if the award is made in respect of an injury to the claimant or partner2, but not if for a surviving spouse or civil partner (see DMG 85351 - 85352).
1 SPC Regs, Sch IV para 10; 2 Sch IV para 14

http://www.dwp.gov.uk/docs/dmgch85.pdf

atush

If it does come to that, for 100 a month surely the family can keep her afloat for a while. At 95 she surely won't have long, and if you move her statistically she will go due to the stress.

I think you should ask for a re- assessment. will take time. Keeping her where she is, is the best you can do short term.

My FIL was in care and died in his late 80's just after moving into a home, and my MIL died after she reached 95 so i know what it is like for them.

sleepless_saver

sam_yates wrote: »

My Nan has an annuity that is paid to her care home each month, this payment goes straight to the care home and NOT to her at any point, this is to pay for her room in a residential home for the rest of her life. She has been receiving pension credits to top up her pension allowance for 5/6 years

I suspect that what the financial adviser is getting confused with is the fact that you're not taxed on an annuity (e.g. an immediate care needs annuity) that is paid direct to the care home. The rules for pension credit are clearly set out in the DWP decision makers guide which anmarj has linked to.

Was the annuity already in payment when she started getting the pension credit - if so were DWP told about it then and what did they say about it? Where did the money come from to buy the annuity - was it her money or someone else's?

ETA: Is she getting attendance allowance, if she's in England or Wales?

sam_yates

sleepless_saver wrote: »

I suspect that what the financial adviser is getting confused with is the fact that you're not taxed on an annuity (e.g. an immediate care needs annuity) that is paid direct to the care home. The rules for pension credit are clearly set out in the DWP decision makers guide which anmarj has linked to.

Was the annuity already in payment when she started getting the pension credit - if so were DWP told about it then and what did they say about it? Where did the money come from to buy the annuity - was it her money or someone else's?

ETA: Is she getting attendance allowance, if she's in England or Wales?

Thanks for that, yes the annuity was already in place when the pension credit started and the DWP knew about it and said it did not count; they have now changed their mind for some reason after some 5 years. The money came from the sale of her house. No she's not getting the attendance allowance as you don't get that if you are in a care home in England.

sam_yates

atush wrote: »

If it does come to that, for 100 a month surely the family can keep her afloat for a while. At 95 she surely won't have long, and if you move her statistically she will go due to the stress.

I think you should ask for a re- assessment. will take time. Keeping her where she is, is the best you can do short term.

My FIL was in care and died in his late 80's just after moving into a home, and my MIL died after she reached 95 so i know what it is like for them.

Not being rude but I find your reply somewhat offensive. My mum is a pensioner herself and I am not working at the moment due to serious illness, not that you would know that but you have assumed an awful lot about family paying. I sincerely hope she has got a long time left as there is nothing the matter with her apart from being old and having short term memory problems. So thanks but don't kill my nan off just yet!

sam_yates

anmarj wrote: »

this is the definiation of annuity, if it does not fall under home income plan or structured settlement then the income does get taken into account, and financial advisors are not always right. If your nan has an income from any source then it is taken into account as part of means testing. Very little income gets disregarded

from decisions maker guide

Annuity income
85170 An annuity is an annual income and should be taken fully into account1 except for the annuities listed at DMG 85171. The most common type of annuity involves a person paying a lump sum of money to an insurance company. In return the insurance company will pay an agreed sum of money at regular intervals each year until the death of the investor. 1 SPC Act 02, s 15(1)(d)
85171 The exceptions are
1.
Home income plans. These are schemes where an annuity is bought with a loan secured on the home. The income is subject to a partial disregard1 if certain conditions are satisfied (see DMG 85221 et seq).
2.
Structured settlements. This is where compensation relating to a personal injury award is used to buy an annuity for the injured person. The income is fully disregarded for SPC purposes, if the award is made in respect of an injury to the claimant or partner2, but not if for a surviving spouse or civil partner (see DMG 85351 - 85352).
1 SPC Regs, Sch IV para 10; 2 Sch IV para 14


Where have you got that information from as the page does not exist? We have been told by the DWP that there is no rulings as to whether she could get pension credit if she has an annuity; a special department has now made the decision after paying it and knowing about the annuity for over 5 years. If there is no information regarding this than in the eyes of the law and DWP and precedent can be set surely, as this cannot be the only person it's happening to?

Stargazer57

sam_yates wrote: »

Where have you got that information from as the page does not exist?

There aren't any page numbers. Everything is indexed by one of 504 paragraph numbers. I clicked on the link that anmarj gave and went straight to para 85170.

atush

sam_yates wrote: »

Not being rude but I find your reply somewhat offensive. My mum is a pensioner herself and I am not working at the moment due to serious illness, not that you would know that but you have assumed an awful lot about family paying. I sincerely hope she has got a long time left as there is nothing the matter with her apart from being old and having short term memory problems. So thanks but don't kill my nan off just yet!

I did not mean to be rude or offensive. But I do know from personal experience tht moving an older person in a care home can and will hasten their death. So w/o knowing your personal circumstances which you did not offer, I was saying to keep her in the same home as long as possible. Less time for you I guess than others. But we aren't to know your family is in such dire circumstances.

And I did say to get her reassessed as this takes some time and will prolong things in your favor.

I agree that a 95 yr old can last a while longer- sometimes a lot longer, and my MIL would have if the NHS didn't actually kill her when she went in to hospital.

Errata

sam_yates wrote: »

Thanks for that, yes the annuity was already in place when the pension credit started and the DWP knew about it and said it did not count; they have now changed their mind for some reason after some 5 years. The money came from the sale of her house. No she's not getting the attendance allowance as you don't get that if you are in a care home in England.

If your nan is self funding then she's eligible for AA, if she (or someone helps her) to apply for it. At her age she would probably be eligible for the top rate which is c£100 pw.

Pollycat

Sam
so DWP were aware of this annuity before they granted your Nan Pension Credit (5 or 6 years ago) but now they say she's not entitled to PC - is that true?
What I'm getting at is have your Nan's circumstances changed in any way?

I'm guessing your Nan (at her age) would have had an Assessed Income Period so I'm wondering why they suddenly decided to relook at what they were paying to your Nan.

Have they given a reason for the change of mind?