Universal credit and private pension contributions

calcotti

I think OP needs to get a clear decision from the DWP. If they refuse to take the personal pension contributions into account he can request an MR and then go to appeal. In parallel raisewith MP.

From what I have read I believe the6 should be taken into account - but as hucksters says I am not aware of any mechanism in place to allow this to happen. Given reliance on RTI information to generate UC monthly amounts taking into account pension contributions paid direct by the claimant would appear to require manual intervention whereas the aspiration was for UC to be largely automated in order to keep the admin costs down (that’s not working out very well).

Bec8605

Thank you everyone!

It is a standard Life pension, so definately registered!

I will try and do some more digging around and see what I can find out, although approaching MP is possibly the way forward.

In order for me to be able to have it deducted from tax credits, I had to just send an annual statement at end of tax year, but like you guys have said, as UC is a month on month, I'm not sure how they could administer it as such. Without having to put a dispute in every month.

Thank you all for taking time to reply though, I will come back if I manage to get any further

huckster

Pure guess on my part.

If UC know nothing about any private pension deduction from earnings, perhaps the reason for this, is that the private pension contributions are reported by the employers within the RTI reporting system.

So you would inform your employers that you have a private pension you make contributions towards and they report the information.

Or perhaps your pension company, makes a report to HMRC and when the RTI information is received by UC, it includes the private pension contribution deduction.

There must be a reason UC is not involved in the private pension contributions issue. The logical answer is that the information is reported either by the employers or pension company to HMRC, so it can be included within the RTI reported information that UC receives.

I very much doubt that under GDPR, UC would be receiving exact pension contributions information, because what you pay into a private pension is not data UC would need to process. But an RTI feed with the deduction applied, would enable the correct earnings to be considered.

Icequeen99

calcotti wrote: »

I think OP needs to get a clear decision from the DWP. If they refuse to take the personal pension contributions into account he can request an MR and then go to appeal. In parallel raisewith MP.

From what I have read I believe the6 should be taken into account - but as hucksters says I am not aware of any mechanism in place to allow this to happen. Given reliance on RTI information to generate UC monthly amounts taking into account pension contributions paid direct by the claimant would appear to require manual intervention whereas the aspiration was for UC to be largely automated in order to keep the admin costs down (that’s not working out very well).

There are lots of examples of this unfortunately, mainly where it favours DWP. So pension contributions like in this case has to be adjusted manually. Same with unreimbursed work expenses - you can deduct them under the legislation but they won't show up in the RTI feed. Both would increase a UC award.

IQ

calcotti

The regulation seems quite clear
UC Regulations 2013 - Regulation 55
https://www.legislation.gov.uk/uksi/2013/376/regulation/55/made

Employed earnings
55
(5) In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—
(a)any relievable pension contributions made by the person in that period;

There is nothing in here limiting it to contributions made through a payroll. The question should just be what evidence DWP require in order to be able to do this.

Icequeen99

calcotti wrote: »

The regulation seems quite clear
UC Regulations 2013 - Regulation 55
https://www.legislation.gov.uk/uksi/2013/376/regulation/55/made

Employed earnings
55
(5) In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)—
(a)any relievable pension contributions made by the person in that period;

There is nothing in here limiting it to contributions made through a payroll. The question should just be what evidence DWP require in order to be able to do this.

I agree - whether it is in the RTI feed or not is irrelevant.

IQ

Bec8605

Thank you for all your help, I have just sent an email to my local MP on the matter to find out if he can help!

This could potentially cost thousands of people money, and it just seems very unfair, when all literature suggests that ALL personal pensions are deductable, I can not see anywhere it states that is workbased pension ONLY.

I shall update this thread if / when I get a response.

I do appreciate you all taking the time to reply to me.

huckster

I have very little knowledge of payroll, but I am sure that I have read, that employers can report other information on their returns to HMRC.

I wonder if there is a section on an RTI report for your employers to record information about private pension contributions you make, that are not connected to your employment. Have you asked your employers payroll department or HMRC about this ?

xylophone

when all literature suggests that ALL personal pensions are deductable,

https://revenuebenefits.org.uk/universal-credit/guidance/entitlement-to-uc/what-is-income-for-uc/

UC is generally based on net income and therefore from the claimant’s employed earnings can be deducted:

Any relievable pension contributions made to a registered scheme


Generally employed earnings will be reported to DWP by HMRC under the Real Time Information (RTI) system.

The general rule is that where a claimant is, or has been, engaged in an employment in respect of which their employer is a ‘real time information employer’:

The amount of their employed earnings for that assessment period is to be based on the information which is reported to HMRC for PAYE purposes and is received by the Secretary of State from HMRC in that assessment period
Where no information is received in an assessment period from a real time information employer - the amount of earnings is to be treated as nil.
However this general rule does not apply:

In respect of any assessment period where the Secretary of State considers that the information from the employer is unlikely to be sufficiently accurate or timely or
In respect of any assessment period where:
No information is received from HMRC and DWP consider this is because of a failure of the employer to report the information to HMRC or a failure of the HMRC computer system or
DWP considers that the information received from HMRC is incorrect, or fails to reflect the definition of employed earnings in the UC regulations, in some material respect.

Where any of these exceptions apply, DWP must make a decision as to the amount of the person’s employed earnings for the assessment period in accordance with the UC regulations using such information or evidence as the DWP thinks necessary.

calcotti

huckster wrote: »

I have very little knowledge of payroll, but I am sure that I have read, that employers can report other information on their returns to HMRC.

I wonder if there is a section on an RTI report for your employers to record information about private pension contributions you make, that are not connected to your employment. Have you asked your employers payroll department or HMRC about this ?

Can't see how that would work. Where would the employer get the information from - I don't think they could rely on the word of their employee. I suspect that pension companies themselves only file annual reports to HMRC so HMRC do not have any RTI information available to pass to DWP.

This seems such a fundamental point that I'm surprised I can't find it raised anywhere else. There will be many people paying into pension funds outside their employment - particularly, but not exclusively, those who were already doing so before pension auto enrolment was introduced.

OP, notwithstanding having raised this with you MP, I think you should still progress an MR and, if necessary an, appeal with DWP. The grounds appear quite straightforward, something like this:

You have advised me that payments made by me directly into a personal pension plan cannot be taken into account as deductions when determine my net pay to be taken into when calculating my UC entitlement. Regulation 55 (5) (a) of the UC Regulations 2013 states "In calculating the amount of a person’s employed earnings in respect of an assessment period, there are to be deducted from the amount of general earnings or benefits specified in paragraphs (2) to (4)— (a)any relievable pension contributions made by the person in that period;". I therefore believe your decision is incorrect in law.