Guaranteed Pension Credit concern

SPARKSWILLFLY

This is a question I am asking on behalf of a 78 year relative (a widow) who qualified for and is still currently receiving Guaranteed Pension Credit.

The lady from the DWP came out to her home to assess things and was satisfied that she fully qualified (savings under £10,000 etc etc).

However, the question that she has and which she meant to ask the DWP lady is what happens if she doesn't spend ALL of her weekly entitlement every week? She likes to keep some "rainy day" money (NOT savings) in the house to pay for any irregular additional things she needs for the home, birthday gifts, periodic utility bills etc. Even though a small accumulation of this unspent and ever changing quantity pension benefit in her possession at home isn't taking her over the £10,000 savings bank, she wonders, if the day comes that it does, would she have to notify the DWP? We are talking about a few hundred pounds over, as an example. Bear in mind that this would NOT be savings and some or all of these could easily disappear within a two week period depending on what she needed for her house or through circumstances (i.e. money to live on, covering unforeseen eventualities).

She is honestly worrying herself sick about this and I have said I post this on her behalf until such time as the DWP reopens after the holidays in the hope that someone who knows can help assist in settling her for the next few days into 2018. I am clueless about this stuff and would appreciate any helpful responses to ease her mind a little.

Thank you.

poppy12345

SPARKSWILLFLY wrote: »

This is a question I am asking on behalf of a 78 year relative (a widow) who qualified for and is still currently receiving Guaranteed Pension Credit.

The lady from the DWP came out to her home to assess things and was satisfied that she fully qualified (savings under £10,000 etc etc).

However, the question that she has and which she meant to ask the DWP lady is what happens if she doesn't spend ALL of her weekly entitlement every week? She likes to keep some "rainy day" money (NOT savings) in the house to pay for any irregular additional things she needs for the home, birthday gifts, periodic utility bills etc. Even though a small accumulation of this unspent and ever changing quantity pension benefit in her possession at home isn't taking her over the £10,000 savings bank, she wonders, if the day comes that it does, would she have to notify the DWP? We are talking about a few hundred pounds over, as an example. Bear in mind that this would NOT be savings and some or all of these could easily disappear within a two week period depending on what she needed for her house or through circumstances (i.e. money to live on, covering unforeseen eventualities).

She is honestly worrying herself sick about this and I have said I post this on her behalf until such time as the DWP reopens after the holidays in the hope that someone who knows can help assist in settling her for the next few days into 2018. I am clueless about this stuff and would appreciate any helpful responses to ease her mind a little.

Thank you.

As stated in this link, any savings/capitol that takes them over £10,000 MUST be reported.
https://www.gov.uk/pension-credit/eligibility

"rainy day" money is otherwise known as savings...

Alice_Holt

Every £500 or part of £500 of capital over £10,000 is assumed to give you a weekly income of £1 a week. This is called ‘deemed income’. For example, if you have savings of £12,200, a weekly deemed income of £5 is included in your income assessment.
This will have the effect of reducing the Pension Credit payment, by a maximum of £5 pw in the example above.

See page 16/17 of https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

Mojisola

SPARKSWILLFLY wrote: »

However, the question that she has and which she meant to ask the DWP lady is what happens if she doesn't spend ALL of her weekly entitlement every week?

She likes to keep some "rainy day" money (NOT savings) in the house to pay for any irregular additional things she needs for the home, birthday gifts, periodic utility bills etc.

Even though a small accumulation of this unspent and ever changing quantity pension benefit in her possession at home isn't taking her over the £10,000 savings bank, she wonders, if the day comes that it does, would she have to notify the DWP?

She is honestly worrying herself sick about this

There's no point worrying about it if it's something that may or may not happen in the future!

The forms are clear that any money you have counts as capital - it doesn't matter whether you're keeping it in an account or as cash.

If she gets to the fortunate position of having over £10k in savings, there's no need to worry about losing a little of her weekly income through a reduced PC payment.

SPARKSWILLFLY

Alice_Holt wrote: »

Every £500 or part of £500 of capital over £10,000 is assumed to give you a weekly income of £1 a week. This is called ‘deemed income’. For example, if you have savings of £12,200, a weekly deemed income of £5 is included in your income assessment.
This will have the effect of reducing the Pension Credit payment, by a maximum of £5 pw in the example above.

See page 16/17 of https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

That is very helpful, much appreciated, Alice.:T

SPARKSWILLFLY

Mojisola wrote: »

There's no point worrying about it if it's something that may or may not happen in the future!

The forms are clear that any money you have counts as capital - it doesn't matter whether you're keeping it in an account or as cash.

If she gets to the fortunate position of having over £10k in savings, there's no need to worry about losing a little of her weekly income through a reduced PC payment.

No, that's not really the main thing stressing her out, it's more the potential of constantly having to update the DWP (possibly on a weekly basis in the event that she doesn't spend her entire entitlement that week and leaves a residual which then may build up a little in her purse - even if she is a couple of pounds over). And then, as an example, by the time something like a quarterly phone bill comes in (her lifeline and her bills are always on the high side) or she needs a new household appliance or something, that sum could go in fell swoop and then she has to notify them (DWP) again that the amount is below £10,000.

It seems never-ending with constant amendments to her payments in that case. Best thing she can do is spend every penny she has coming in without worrying about "what ifs" and then using her savings if the worst comes to the worst.

NotSuchASmugMarriedNow

She could keep what she doesn't spend in cash in the house. then she would have it to hand instantly when needed and the bank account wouldn't increase. This is a very popular tactic amongst the elderly. (probably explains why they are prime targets for burglars though!)

SPARKSWILLFLY

NotSuchASmugMarriedNow wrote: »

She could keep what she doesn't spend in cash in the house. then she would have it to hand instantly when needed and the bank account wouldn't increase. This is a very popular tactic amongst the elderly. (probably explains why they are prime targets for burglars though!)

Yes, that would be ideal and was the original intention, however it would seem from the above posts in relation to the factsheet which confirms same that whatever she has in the house would count as combined capital. And if that total is even marginally above £10,000 (even if that situation changes the next week when it falls below it, let's say), the DWP must be notified.

I can understand why she is so worked up. I'm years younger than her and I couldn't cope with that.

Mojisola

SPARKSWILLFLY wrote: »

No, that's not really the main thing stressing her out, it's more the potential of constantly having to update the DWP (possibly on a weekly basis in the event that she doesn't spend her entire entitlement that week and leaves a residual which then may build up a little in her purse - even if she is a couple of pounds over). And then, as an example, by the time something like a quarterly phone bill comes in (her lifeline and her bills are always on the high side) or she needs a new household appliance or something, that sum could go in fell swoop and then she has to notify them (DWP) again that the amount is below £10,000.

The answer is easy - just make sure that when her capital gets up to, say, £9,500, look around for things that she may need replacing in the house or have a short holiday or pay someone to do maintence on the house or have cleaners in to do a deep clean throughout and so on.

If she does go over, she still doesn't need to tell them every week - as long as she accepts that she will have a small overpayment to give back to them, she can do it more infrequently.

It will cost the DWP more than she is paying back if she tells them every week.

SPARKSWILLFLY

Mojisola wrote: »

The answer is easy - just make sure that when her capital gets up to, say, £9,500, look around for things that she may need replacing in the house or have a short holiday or pay someone to do maintence on the house or have cleaners in to do a deep clean throughout and so on.

If she does go over, she still doesn't need to tell them every week - as long as she accepts that she will have a small overpayment to give back to them, she can do it more infrequently.

It will cost the DWP more than she is paying back if she tells them every week.

That's a very nice idea. Never thought to suggest something like that to her. Thanks.

I just think she gets herself into a panic, always wanting to do the right thing and worries that she may be breaking the law and then get into serious hot water as a result (good old fashioned honest mentality here, and a woman who is often too honest for her own good). If only there were more like her!

I could understand her concern, admittedly as the amount she may have "to spare" could vary from week to week - but that very same amount, even though it may not be much and also insufficient to exceed the maximim savings total, it do so could in time, but then be spent in full for an unforeseen even in the home.

bengal-stripe

SPARKSWILLFLY wrote: »

This is a question I am asking on behalf of a 78 year relative (a widow) who qualified for and is still currently receiving Guaranteed Pension Credit.

First of all, check that your relative is not in an 'Assessed Income Period' (AIP). Although AIPs have now been abolished and no new ones were issued after April 2016, if she was on an AIP prior to that date and as she would have been over 75 when it was last renewed, the AIP would run for life. Other AIP are being cancelled prematurely, but not the life ones. They will run to their natural endpoint, unless there is a distinct change of circumstances: marriage or the person going into a care home.

If your relative is on an AIP, any change in income or capital is being disregarded. Look at notification of the new pension rates, which would have come through in March of this year. This document states whether or not she is on an AIP.

Even if your relative is not on an AIP, if the current payment, be it weekly or four-weekly, takes her over the 10k limit this is disregarded until the next regular payment is due. The payment has to hit an account that has already exceeded the limit of 10k. It is only the 'old' excess that is counted as capital, not the payment that is supposed to cover her until the next payment is due.