ESA and private pension annuity

euanT

Dunroamin wrote: »

If you're on means tested benefits, you should declare a everything.

If total capital is under £6000 surely you do not have to declare it and any income from it.

Quote from age UK factsheet No 81

" 5.1 How capital is taken into account
The amount of capital you have can affect your eligibility for income-related
ESA. The same limits apply to both single people and couples. If you have a
partner, their capital is added to yours. Factsheet 81  April 2012 6 of 30
Calculating income-related Employment and Support Allowance
For income-related ESA there is a capital limit of £16,000. If you have more
than £16,000 and none of it is ignored you will not be able to get incomerelated ESA.
Capital up to £6,000 (£10,000 if you are in a care home), and any income you
receive from it, is ignored for income-related ESA.

xylophone

The fact that it is ignored does not necessarily mean that you don't need to declare it?

With regard to the annuity, you just advise the DWP now of the amount and payment schedule and let them work out how it affects your payments?

rogerblack

euanT wrote: »

If total capital is under £6000 surely you do not have to declare it and any income from it.

But an income is not capital.
If you are paid £5000/year - from something - that is generally an income - it is not capital.
The remainder of the first payment becomes capital after the second payment, but up until that point, it's income.
Income must be seperately reported.

Housing_Benefit_Officer

euanT wrote: »

My P60 for 12/13 shows a total income for annuity/pay as £4.56 so surely can not flag up much to anyone!!!

And what will your P60 for 2013/14 show? Your annuity? If it will and you haven't declared it.

euanT

Housing_Benefit_Officer wrote: »

And what will your P60 for 2013/14 show? Your annuity? If it will and you haven't declared it.

Obviously I do not have Next years P60 nor do HMRC. My first payment will be in May 2014 so will not show up till 14/15 tax year

Housing_Benefit_Officer

euanT wrote: »

If total capital is under £6000 surely you do not have to declare it and any income from it.

Quote from age UK factsheet No 81

" 5.1 How capital is taken into account
The amount of capital you have can affect your eligibility for income-related
ESA. The same limits apply to both single people and couples. If you have a
partner, their capital is added to yours. Factsheet 81  April 2012 6 of 30
Calculating income-related Employment and Support Allowance
For income-related ESA there is a capital limit of £16,000. If you have more
than £16,000 and none of it is ignored you will not be able to get incomerelated ESA.
Capital up to £6,000 (£10,000 if you are in a care home), and any income you
receive from it, is ignored for income-related ESA.

Income from Annuity is income and if you Annuity has started it is treated as income:-

http://www.dwp.gov.uk/docs/dmgch28.pdf

Income due but not yet paid
28640 Treat income
1. that is due to a member of the family and
2. has not been paid .


Other income taken fully into account
28100 An annuity is an annual income. 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 each year until the death of the investor.


So you Annuity is treated as income from the date it started irrespective of the date it actually going to be paid.

Fail to declare it now and you will end up with a large overpayment and possible prosecution for fraud.

euanT

Housing_Benefit_Officer wrote: »

Income from Annuity is income and if you Annuity has started it is treated as income:-

http://www.dwp.gov.uk/docs/dmgch28.pdf

Income due but not yet paid
28640 Treat income
1. that is due to a member of the family and
2. has not been paid .


Other income taken fully into account
28100 An annuity is an annual income. 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 each year until the death of the investor.


So you Annuity is treated as income from the date it started irrespective of the date it actually going to be paid.

Fail to declare it now and you will end up with a large overpayment and possible prosecution for fraud.

OK so if I declare it now, will the DWP work out an equivalent monthly amount and start taking it off me WHEN!!!!

How can they deduct an amount for income in the future??

Housing_Benefit_Officer

euant wrote: »

ok so if i declare it now, will the dwp work out an equivalent monthly amount and start taking it off me when!!!!

How can they deduct an amount for income in the future??

Income is treated as income from the date it started irrespective of the actual date of receipt. Ie earnings - you are treated as working and earning from the date you commence work not from the date you get your first wage packet. A self employed person is treated as being self employed from the date you commence self employment even if you don't get your first payment from a client for six months. You need to declare your annuity and let the dwp sort the rest out.

My post above gave you a handy link to DWP Guidance.

euanT

Housing_Benefit_Officer wrote: »

Income is treated as income from the date it started irrespective of the actual date of receipt. Ie earnings - you are treated as working and earning from the date you commence work not from the date you get your first wage packet. A self employed person is treated as being self employed from the date you commence self employment even if you don't get your first payment from a client for six months. You need to declare your annuity and let the dwp sort the rest out.

My post above gave you a handy link to DWP Guidance.

I am in the process of wading through the DWP guidance at the moment, god why do they make things so complicated!!

Dazed_and_confused

euanT wrote: »

I took out the annuity in May 2013 and will not receive any money until May 2014, got the tax free lump sum straight away but as it was under £6000 did not declare it, am I correct!!

If you only took the annuity out in May 2013 and aren't getting a payment (ignoring the tax free lump sum) until May 2014 how on earth have you managed to get a P60 for 2012/13 showing income on it?

"My P60 for 12/13 shows a total income for annuity/pay as £4.56 so surely can not flag up much to anyone!!!"