DWP trying to get money back for capital I knew nothing of

xylophone

May be of interest re PC

https://www.whatdotheyknow.com/request/guarantee_pension_credit_granted

TELLIT01

xylophone wrote: »

But had he reached "Pension Credit Age" ( the date on which a woman of his age would have been eligible for PC)?

Yes - so of course that would have impacted then. The change to female retirement age has changed all that since. Sorry if I confused the situation.

calcotti

TELLIT01 wrote: »

There are differing rules for various benefits. My brother hadn't reached State Pension age but the assumed income from a pension fund was taken into account when he applied for Pension Credits. That was a few years ago so it's possible rules have changed although from my experience is rarely to the benefit of a claimant.

Because the OP is female State Pension age and Pension Credit age will be the same.

calcotti

mum_of_joey wrote: »

Thank you for your reply and information.

I have taken the pension pot out now, taking 25% tax-free and the rest in an annuity. I have recent personal debts which need repaying (car repairs) and wanted to keep a little in hand to pay for future car repairs, my car now at an age where it fails the MOT unless some work is done on it. I also have 3 cats that I had years before I started receiving the benefits - they are getting elderly and one isn't covered by insurance for her particular disease.

I have not been on benefits constantly - it depended on what job I had at the time. But they are referring to the past 4 years when I've been on GPC, HB and Council Tax relief.

But what I can't find anywhere, apart from a section in the handbook issued to the DWP (online), is whether I should be repaying anything at all up until the point that this pension surfaced. After all, why would I put myself through the agony of depression with ever-increasing debts if I knew I had £30,000 knocking around in the background? No-one would. I would have had it out of there in a second and not had the horror of paying endless amounts of interest on debts.

The section in the handbook states that they must prove that deprivation of capital was done in order to gain benefits. This is the whole crux of the matter. At the time I needed the GPC, I NEEDED it in order to live. I had no idea that there was a 'nest egg' somewhere. I have been selling my furniture and other items and the more I buy food for my cats, the less food I buy for myself and this was BEFORE the pension pot emerged. There has been no 'deprivation of capital' - there WAS NO capital that I knew of.

Someone has suggested that I should have cashed the whole lot in and paid off my debts. Apart from the tax implication of doing that, wouldn't that seen to be 'depriving myself of capital in order to get benefits', as the creditors have, for the past year, been happy to accept the nominal amount I have been paying them each month, therefore they weren't 'due'? It's too late now, anyway. I could have increased my payments to them with the monthly annuity income, but not if all that income is now going to be taken from me to pay back 4 years worth of benefits. It will wipe it out. I fully expected the line to be drawn at the date that this pension emerged (this year), and benefits to be stopped from then.

I have tried to explain in my earlier post that this is not about deprivation of capital because a pension pot is not capital. The DWP have to calculate what income to assume from your pension pot, recalculate your Pension Credit entitlement and then compare it with what you actually received. The difference will be an overpayment and you will be expected to pay it back. Overall you will probably be no worse off (other than the stress) than if you had known about the pot at the time. I don’tthink You will have grounds to challenge a decision that follows this principle although I would certainly challenge any fine, should they seek to impose one.

sheramber

It is not a question of deprivation of capital, it is not having income from a weekly pension payment that you could have had.This is called notional income.

If the pension company tell DWP that you would have received a pension of , for example, £20 per week if you had drawn the pension at the time it became available to you then DWP will work out what payment you would have been due when receiving that income of £20 each week.

They will compare what you would have been entitled to against the payment you received and the difference will be an overpayment which you will be due to pay back.

Also, your future benefit payments will be calculated including the amount of income you receive from the pension from now on so may be reduced.

You will have to wait for DWP to advise you of the amounts involved before you will know how you are going to be affected.

xylophone

It is not a question of deprivation of capital, it is not having income from a weekly pension payment that you could have had.This is called notional income.........

Post 2

https://forums.moneysavingexpert.com/discussion/comment/74755756#Comment_74755756

You will have to wait for DWP to advise you of the amounts involved

Indeed.

mum_of_joey

Apologies to Calcotti and others about this. I seemed to be working things out in a 'woolly-headed mess'. This morning, I have cottoned on to the way that this is worked out by the DWP, thanks to you, and have used the benefits calculator given. It is true that I was confused with the 'deprivation of capital' thing, as didn't realise that it didn't become capital until the pension pot is taken.

Presuming that they are working on figures from 4 years ago and progressively coming forwards, (though I have gone for the 'worst case scenario' and put higher figures for the whole 4 years), it looks as though it might not be as bad as I first thought - possibly a repayment of not more than the £2000 mark instead of the £5,000+ mark that I had somehow worked out myself, and if they will take this in instalments, it might not seem so bad. I am still left with Pension Credit, according to the calculations.

One more question, though: it didn't come back with a 'Savings Credit' figure. I understand that they are 'doing away' with this, but I seem to be the age where I still qualify for it (67). Would they now apply that to me as I now have the annuity running and have done for about a month?

Many thanks for all suggestions and help on here. I might be able to sleep at nights now!

xylophone

See below re GPC and SC

https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf

mum_of_joey

Thank you, xylophone, for the link. Even they say that Savings Credit is very complicated to work out! So I think that that will be one of the questions when I go to the CAB. It does look like an informative booklet though, generally, so I will sit and absorb what I can from that. Thanks.

calcotti

When DWP do the calculations they should take into account any entitlement to Savings Credit that arises as a result of the income they calculate you should/could have been receiving.

I think you really have to wait for DWP to come back to you with their calculations.