Universal credit and private pension contributions

NedS

TMel42 said:

I will have to go ahead with the appeal and I presume raise all evidence to state that nowhere is it stated that only statutory pension deductions are able to be deducted from income used for UC calculations. What I also do know is that all the deductions I am querying are historical and were being deducted whilst I was on the tax credit system. 

I have read on another site that I need to request a MR for every period that the deductions are refused, so having read that should I really be querying the lack of private pension contribution every month in my online journal? I also need to query the lack of any correspondence regarding the professional fees I pay as these I believe can also be deducted from my income as they are not refunded by my employer. The payments are split over 4 consecutive months to enable me to budget for them  - this is going to be very messy if they refuse every month and I have to MR every month. 

You should only need to raise the issue once (and request one MR), although it wouldn't hurt to note your additional pensions contributions every month on your journal for record, especially when it comes to backdating once you finally win. Once they have told you that they are not allowing those deductions you will need to follow the process of requesting a MR, and if that goes against you, requesting an appeal at tribunal. I would keep your appeal really simple - it's a matter of law, and the relevant regulation the court must consider is Regulation 55(5)(a). DWP will need to respond within 30 days to your submission for appeal (this is the point at which someone from DWP legal who actually understands the law looks at it), at which point I strongly suspect they will concede the case and they will instruct your case manager to allow the pension contributions. DWP have no interest in taking a case to tribunal that they know they will lose. At that point you will be asked for evidence of your pension contributions backdated to when you first raised the issue.

Going forward, you will have to request and provide evidence of your pension contributions every month at the end of the AP, and your award will have to be manually recalculated. Unfortunately there is currently no way for DWP to automate the process.

As you state, HMRC (Tax Credits) have no issue understanding the difference between gross earnings and net earnings and interpreting the law, so it's hard to fathom why DWP make such a mess of this. I attribute it to the fact it's relatively uncommon, it's not covered in the training and I can't find it covered anywhere in guidance, at which point it's easier for them to say no than actually try to get to grips with what they should be doing. Couple that with the fact that when you say, hey, did you know you could pay your entire salary into a pension and then claim full UC as if you are not earning anything, people naturally think that can't be right. But remember, this is not subjective or open to interpretation, it's the law. The law states all relievable pension contributions should be deducted from your gross earnings when calculating your UC entitlement.

calcotti

TMel42 said:

...What I also do know is that all the deductions I am querying are historical and were being deducted whilst I was on the tax credit system. 

In that case why are you asking about Universal Credit rules? You can’t have been on Tax Credits and UC at the same time. Anything that happened before you claimed UC is irrelevant.

TMel42

calcotti said:

TMel42 said:

...What I also do know is that all the deductions I am querying are historical and were being deducted whilst I was on the tax credit system. 

In that case why are you asking about Universal Credit rules? You can’t have been on Tax Credits and UC at the same time. Anything that happened before you claimed UC is irrelevant.

Apologies, it isn't relevant. I think i'm just finding it hard to understand why there is so many problems around this where I didn't have any before.

steely333

Hi all as asked a brief outline to my situation as it is connected to this thread as its this thread that started me on my road, so thankyou all who have contributed and commented.
I have an auto enrolled pension for maybe the last 4/5 yrs and have had the minimum taken from my gross in contributions, i also have been personally contributing from my bank via direct debit or maybe standing order cant remember which for almost the same amount of time. For maybe the last year i have found myself on less hours at work and on UC (not covid related) but i still have my 5% taken automatically and i still privately pay into my pension.
Then only in the last couple of months i found this thread and followed it closely and did my own research coming up with much of the same information, i first approached the subject in my journal and was turned down i believe 3 times, i then went for an MR and have been in touch with my MP so now im in waiting for an outcome also, and also agree with many the legislation 2013 really couldent be clearer.
I also read somewere and im sure someone could help out on this that i cannot contribute anymore out of my gross wages through work if it takes me below minimum wage? (Im on minimum wage now) surely thats a contridiction if they take the minimum 5% anyway?
So out of interest i called my pension provider and they told me depending on how my works payroll is set up i can contribute as much as i want?
Im just waiting on payroll to see if this is possible, all seems a bit contradictory to me?
But if it was possible would this not solve the problem.?

NedS

steely333 said:

I also read somewere and im sure someone could help out on this that i cannot contribute anymore out of my gross wages through work if it takes me below minimum wage? (Im on minimum wage now) surely thats a contridiction if they take the minimum 5% anyway?
So out of interest i called my pension provider and they told me depending on how my works payroll is set up i can contribute as much as i want?
Im just waiting on payroll to see if this is possible, all seems a bit contradictory to me?
But if it was possible would this not solve the problem.?

Some employers offer a scheme called salary sacrifice whereby you give up (sacrifice) part of your salary in exchange for your employer making larger pension contributions for you. Your employer is paying more into your pension in return for paying you less. However, because your salary has been reduced, you can not sacrifice below national minimum wage as that would be illegal (your employer MUST pay you national minimum wage after any sacrifice)

This is completely different from normal pension contributions were you make contributions out of your gross earnings (and your employer often matches a proportion). Here the rules are that you can not contribute more than your Gross earnings and you and your employers contributions can not exceed your annual allowance.

So depending on the scheme in operation in your workplace, you may be able to contribute more to your workplace pension and have that done through your employer so you don't have to jump through these hoops with UC that arise when you make additional contributions out of your net take home pay into something like a SIPP.

TMel42

I must have jinxed everything when I said tax credits have processed my private pension contributions fine before. They now wont process them on my final tax credits claim as it doesn't go through RTI and I have had to do a MR for that also so far. They have now deducted what they deem is an overpayment from my UC claim, all this after I have processed the claim the same way since 2015. It is driving me bonkers - I now am working through an MR for tax credits and a tribunal for UC. It's complete madness!

steely333

TMel42 said:

I must have jinxed everything when I said tax credits have processed my private pension contributions fine before. They now wont process them on my final tax credits claim as it doesn't go through RTI and I have had to do a MR for that also so far. They have now deducted what they deem is an overpayment from my UC claim, all this after I have processed the claim the same way since 2015. It is driving me bonkers - I now am working through an MR for tax credits and a tribunal for UC. It's complete madness!

The Tax Credits (Definition and Calculation of Income) Regulations 2002 regulations 3 (7) states:- 

Dosent this take care of the tax credit issue as your still claiming tax credits?

TMel42

steely333 said:

TMel42 said:

I must have jinxed everything when I said tax credits have processed my private pension contributions fine before. They now wont process them on my final tax credits claim as it doesn't go through RTI and I have had to do a MR for that also so far. They have now deducted what they deem is an overpayment from my UC claim, all this after I have processed the claim the same way since 2015. It is driving me bonkers - I now am working through an MR for tax credits and a tribunal for UC. It's complete madness!

The Tax Credits (Definition and Calculation of Income) Regulations 2002 regulations 3 (7) states:- 

Dosent this take care of the tax credit issue as your still claiming tax credits?

I can't seem to find the regulation you are referring to.

My tax credits claim ended when the universal credit claim started ( I basically went from a single claimant on the tax credit system to claiming as a couple on the UC system). I am trying to finalize the tax credit claim at its end date but they are now saying it's been overpaid for the year as they wont accept the private pension contributions. They have accepted the same pension contributions and professional fee deductions calculations for years without it being a problem, it even states in the calculation booklet they send out with paperwork to do the calculations as I have done. And now the reason they aren't accepting is because it isn't declared through the RTI system. 

I'm hoping to have a resolve on this soon, I sent a letter with all evidence enclosed as soon as I was advised I would have to go through MR.

steely333

TMel42 said:

steely333 said:

TMel42 said:

I must have jinxed everything when I said tax credits have processed my private pension contributions fine before. They now wont process them on my final tax credits claim as it doesn't go through RTI and I have had to do a MR for that also so far. They have now deducted what they deem is an overpayment from my UC claim, all this after I have processed the claim the same way since 2015. It is driving me bonkers - I now am working through an MR for tax credits and a tribunal for UC. It's complete madness!

The Tax Credits (Definition and Calculation of Income) Regulations 2002 regulations 3 (7) states:- 

Dosent this take care of the tax credit issue as your still claiming tax credits?

I can't seem to find the regulation you are referring to.

My tax credits claim ended when the universal credit claim started ( I basically went from a single claimant on the tax credit system to claiming as a couple on the UC system). I am trying to finalize the tax credit claim at its end date but they are now saying it's been overpaid for the year as they wont accept the private pension contributions. They have accepted the same pension contributions and professional fee deductions calculations for years without it being a problem, it even states in the calculation booklet they send out with paperwork to do the calculations as I have done. And now the reason they aren't accepting is because it isn't declared through the RTI system. 

I'm hoping to have a resolve on this soon, I sent a letter with all evidence enclosed as soon as I was advised I would have to go through MR.

https://www.legislation.gov.uk/uksi/2002/2006/made

(7) In calculating income under this Part there shall be deducted the amount of—

(a)any banking charge or commission payable in converting to sterling a payment of income which is made in a currency other than sterling;

(b)any qualifying donation (within the meaning of section 25 of the Finance Act 1990 (donations to charity by individuals)(22)), made by the claimant or, in the case of a joint claim, by either or both of the claimants; and

(c)any contribution made by the claimant, or in the case of a joint claim, by either or both of the claimants to—

(i)a retirement benefits scheme approved under Chapter 1 of Part 14 of the Taxes Act, including a pilots benefit fund approved under section 607 of that Act(23) and a relevant statutory scheme within the meaning of section 611A of that Act(24);

(ii)a retirement annuity contract approved under Chapter 3 of Part 14 of that Act; or

(iii)a personal pension scheme, approved under Chapter 4 of that Part 14 of that Act.

Hope this helps.

TMel42

steely333 said:

TMel42 said:

steely333 said:

TMel42 said:

I must have jinxed everything when I said tax credits have processed my private pension contributions fine before. They now wont process them on my final tax credits claim as it doesn't go through RTI and I have had to do a MR for that also so far. They have now deducted what they deem is an overpayment from my UC claim, all this after I have processed the claim the same way since 2015. It is driving me bonkers - I now am working through an MR for tax credits and a tribunal for UC. It's complete madness!

The Tax Credits (Definition and Calculation of Income) Regulations 2002 regulations 3 (7) states:- 

Dosent this take care of the tax credit issue as your still claiming tax credits?

I can't seem to find the regulation you are referring to.

My tax credits claim ended when the universal credit claim started ( I basically went from a single claimant on the tax credit system to claiming as a couple on the UC system). I am trying to finalize the tax credit claim at its end date but they are now saying it's been overpaid for the year as they wont accept the private pension contributions. They have accepted the same pension contributions and professional fee deductions calculations for years without it being a problem, it even states in the calculation booklet they send out with paperwork to do the calculations as I have done. And now the reason they aren't accepting is because it isn't declared through the RTI system. 

I'm hoping to have a resolve on this soon, I sent a letter with all evidence enclosed as soon as I was advised I would have to go through MR.

https://www.legislation.gov.uk/uksi/2002/2006/made

(7) In calculating income under this Part there shall be deducted the amount of—

(a)any banking charge or commission payable in converting to sterling a payment of income which is made in a currency other than sterling;

(b)any qualifying donation (within the meaning of section 25 of the Finance Act 1990 (donations to charity by individuals)(22)), made by the claimant or, in the case of a joint claim, by either or both of the claimants; and

(c)any contribution made by the claimant, or in the case of a joint claim, by either or both of the claimants to—

(i)a retirement benefits scheme approved under Chapter 1 of Part 14 of the Taxes Act, including a pilots benefit fund approved under section 607 of that Act(23) and a relevant statutory scheme within the meaning of section 611A of that Act(24);

(ii)a retirement annuity contract approved under Chapter 3 of Part 14 of that Act; or

(iii)a personal pension scheme, approved under Chapter 4 of that Part 14 of that Act.

Hope this helps.

Thank you, that's great! I will use that info if I end up having to do a tribunal