Housing Benefit and Pension Drawdown.

OhWow

Some help for a neighbour please.

She is state pensions age. Lost her job last year and claimed Housing Benefit. Her ex employer have told her she has a very small pension with them that she can claim and that she can have a drawdown on that of just under 2k.  Will the drawdown be counted as capital with Housing Benefit? Or income?  If she takes the drawdown, she will still have under 6k in savings.

NedS

The term pension drawdown usually applies to regular payments from a personal pension and as such is treated as income (assuming you mean £2k/pa split over 12 equal monthly payments?). The pension provider will be able to offer further clarification whether the payments are income as they will be reporting all payments to HMRC.

calcotti

Your use of the term drawdown is confusing. Do you mean that she will get a one off payment of just under £2000 and that will be the end of the pension? If so the money will be treated as capital.

Presumably she also claims Council Tax Reduction.

Separate point altogether but has she checked whether she has any entitlement to Pension Credit?

OhWow

Sorry, the word "drawdown" is what I added and appears to be wrong.

She has been offfered either-

- A one off payment of up to just under 2k maximum, which will reduce her monthly pension payment.

- Or she can have the full pension in full every month and no cash.

OhWow

calcotti said:

Your use of the term drawdown is confusing. Do you mean that she will get a one off payment of just under £2000 and that will be the end of the pension? If so the money will be treated as capital.

Presumably she also claims Council Tax Reduction.

Separate point altogether but has she checked whether she has any entitlement to Pension Credit?

My bad, it was the wrong word.

She can take the one off money from the pension and then receive an even a smaller monthly pension from the ex employer. Will that cash be treated as capital for Housing Benefit? It will keep her under the 6k savings.

The monthly pension amount is very small and won't make much difference to her HB amount.

I'll ask her about Council Tax Reduction.

She hasn't taken her state pension as she normally works and said she has deferred (correct word?) her state pension. She would have over the Pension Credit cap. I was suprised that she is state pension age! She will work again when she finds a job/has her vaccination. She is looking for a job where she can work from home atm.

calcotti

The lump sum will be treated as capital.
Monthly payments will be treated as income,

wahay1950

If money in a drawdown(not paid monthly) is classed as capital, will that not entitle us to HB. We have had to take some of the drawdown to ensure payment of bills for a few years now, not sure how many years money will hold out, am trying to make a claim, but don't know whether expected to use this money. Have not entered a claim yet.

poppy12345

wahay1950 said:

If money in a drawdown(not paid monthly) is classed as capital, will that not entitle us to HB. We have had to take some of the drawdown to ensure payment of bills for a few years now, not sure how many years money will hold out, am trying to make a claim, but don't know whether expected to use this money. Have not entered a claim yet.

This thread is almost 5 years old to save a lot of confusion please start your own thread. 

luvchocolate

I believe if state pension is deferred it's classed as being drawn...otherwise everyone would defer and claim housing and council tax discount 

Spoonie_Turtle

wahay1950 said:

If money in a drawdown(not paid monthly) is classed as capital, will that not entitle us to HB. We have had to take some of the drawdown to ensure payment of bills for a few years now, not sure how many years money will hold out, am trying to make a claim, but don't know whether expected to use this money. Have not entered a claim yet.

Housing Benefit is only available for pensioners to claim now, not working-age people*.  If you are of pension age they will assume you're taking all available pensions and base the calculation on that.

The working age benefit to claim is Universal Credit and ad hoc pension money is classed as capital unless it it regular.  It is based on all your financial circumstances, you can't just claim the housing element.

*Except in specific circumstances which evidently don't apply to you, otherwise you'd have a support worker who'd already be helping you to claim.