Universal credit and private pension contributions

TMel42

NedS said:

TMel42 said:

I will request the statement of reasons. I just feel at a bit of a loss if I'm honest right now.

The decision notice states as follows:

1) The appeal is refused

2) The decision made by the secretary of state on 27/02/21 is confirmed

3) The appellant was entitled to UC for the assessment period 30/01/21-26/02/21. However, the personal pension contributions made by the appellant were correctly considered as earnings by the respondent in calculating the apellant's entitlement. Regulation 55 of the UC Regulations does not apply to these private pension contributions.

4) No party has objected to the matter being decided without a hearing. Having considered the appeal bundle and the requirements of rules 2 and 27 of the tribunal procedure (first tier) (Social emtitlement Chamber) Rules 2008 the tribunal is satisfied that it is able to decide the case in this way.

5) This has been a remote hearing which has been consented to by the parties. The form of a remote hearing was paper: P. A face to face hearing was not held because it was not practicable, and all issues could be determined in a remote hearing on the papers. The tribunal considered a bundle of 39 pages and appendices A & B.

Above, in bold, is just wrong. I would ask the court to explain why they think the regulations, as clearly written, do not apply to you.

I have no idea where you would go from here, to try to get this overturned.

Did you not attend the appeal and present your case, highlighting the regulations that apply?

I didn't attend, to be honest I am fed up of dealing with governmental people. I have to do this and more with regards my disabled child's education, health and care needs and its just very tiring. 

I also thought this would be a straight forward process and would be clearer if I had written evidence rather than trying to memorise regulations and talk my way through it etc.  I wrote a very thorough statement that clearly highlighted the regulations and why I believed they applied to my case.  

calcotti

I completely agree with you that the statement that regulation 55 of the UC regs does not apply is completely wrong. There is nothing in the regulations to support that statement.

You can appeal to the upper tribunal on the grounds that the first Tier Tribunal has made an error in law. However you do first need to get the statement of reasons in order to do this.

NedS

In the meantime, are you able to increase your pension contributions into your workplace scheme, which will automatically be recognised by UC?

TMel42

It’s a next workplace pension. I believe the only way to pay extra into that is through a direct debit or one off contribution do it wouldn’t process through RTI. 

I have been looking at pension contributions and realised I pay slightly  above £3600, which is the threshold per year for non tax payers to receive tax relief. Although I currently work I don’t actually pay tax, could this be the reason why there is an issue? 

Alice_Holt

TMel42 said:

I have been looking at pension contributions and realised I pay slightly  above £3600, which is the threshold per year for non tax payers to receive tax relief. Although I currently work I don’t actually pay tax, could this be the reason why there is an issue? 

     Unlikely.  The pension contribution limit is currently 100% of your income (capped at £40,000).


    In the appeal papers, what was the DWP's main argument(s) for asking the tribunal not to allow the contributions as deductible ?

   The tribunal decision notice appears to refer to just one UC assessment period, (30/01/21-26/02/21), any idea why this might be ?

   

TMel42

Alice_Holt said:

TMel42 said:

I have been looking at pension contributions and realised I pay slightly  above £3600, which is the threshold per year for non tax payers to receive tax relief. Although I currently work I don’t actually pay tax, could this be the reason why there is an issue? 

     Unlikely.  The pension contribution limit is currently 100% of your income (capped at £40,000).


    In the appeal papers, what was the DWP's main argument(s) for asking the tribunal not to allow the contributions as deductible ?

   The tribunal decision notice appears to refer to just one UC assessment period, (30/01/21-26/02/21), any idea why this might be ?

   

Thanks, that's what I thought originally but I think I have just started to doubt myself so much with all of this. 

Dazed_and_C0nfused

TMel42 said:

It’s a next workplace pension. I believe the only way to pay extra into that is through a direct debit or one off contribution do it wouldn’t process through RTI. 

I have been looking at pension contributions and realised I pay slightly  above £3600, which is the threshold per year for non tax payers to receive tax relief. Although I currently work I don’t actually pay tax, could this be the reason why there is an issue? 

You are getting the rules for non taxpayers and non earners mixed up.

Non earners are limited to £3,600 but if you earn say £8,000 and pay no tax then you can contribute £8,000 (inclusive of any basic rate tax relief on relief at source contributions).  The exception being when you have triggered the MPAA limit of £4,000.

The fact that you don't pay any tax doesn't prevent you getting the basic rate relief the pension company adds with relief at source contributions.

TMel42

They have only processed information for the period I first claimed UC when I made the query. Since then they have processed the same way (with the take home pay deduction and tax credit deductions from UC payment)

The appeal notes are a few pages long but I think the significant paragraph is as follows:

'private pension contributions made after tax and national insurance deductions is not income that universal credit deducts from earnings. As explained previous Real Time Information gives information to Universal Credit of how much is earned. If xxxx wants to pay into a private pension after all her deductions by HMRC are taken then that is completely down to xxxx, but that 'money' will not be disregarded because it is paid into a private pension. This is income that she could easily spend in the assessment period on anything else

I have considered all of the available evidence and I uphold the original decision to use the earnings advised by HMRC.'

As per my previous posts,  I have also had to request a MR (which also failed) because UC will not allow a deduction from income for the professional fees I pay each year. They are stating that this is also a choice and not wholly required because of my job. I understand that they would not include with my original tribunal referral as it was queried at a different time.  I obviously would not pay for the professional membership fees if I did not work so it does seem absolute madness that they have not allowed these too.  

calcotti

TMel42 said:

'private pension contributions made after tax and national insurance deductions is not income that universal credit deducts from earnings. '

That statement is, by implication, contradicted by the guidance in Advice to Decision Makers.

H3170 When taking into account employed earnings (and the benefits treated as earnings) in respect of an assessment period, the DM should allow a deduction for

1. the total relievable pension contributions made in that period and 

2. any amounts of

2.1 income tax and
2.2 class 1 contributions

that have been deducted or paid in that assessment period and

3. any amounts withheld as donations to charity in a scheme approved by HMRC in that assessment period.

Note 1: The earnings figure provided by RTI or as a self-reported amount will be the claimant’s gross taxable earnings. Gross taxable earnings already allow for pension contributions paid under “net pay arrangements” and charitable donations. DMs should be aware of this and ensure the deduction is not made twice.

I the statement were true there would be no need for ADM to include the Note advising DMs to make sure they don't deduct the pension twice.

However guidance is not the law.

The key issue is that there is nothing in the regulations to exclude pension contributions made after tax and national insurance deductions being taken into account.

Dazed_and_C0nfused

Entitledto.co.uk, which I believe is pretty well regarded is quite clear on this.

Although you couldn't include contributions made under salary sacrifice personal contributions to a "relief at source" scheme, which is what I think the op is doing, can be deducted.

Personally I find the terminology incredibly confusing as I would say "disregarded" means you ignore them i.e.e you do not take into account these pension contributions but I think what it actually means is that you can deducted them, it's just odd wording 

Maybe one of the UC experts could explain what disregarded means in UC terms??


https://www.entitledto.co.uk/help/pension-contributions