UC & Pension

oh_really

Hi folks, Is a claimant on UC, who has an upcoming occupational pension, compelled to recieve the pension or can the pension be deferred without sanction?

calcotti

Is this a case of you have the option to take a pension now or is it that you are approaching the normal retirement date in accordance with the scheme rules?

If the latter then I think deferring the pension may be seen as deprivation of income and you could be treated as receiving it anyway.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/965132/admh5.pdf
H5150, H5151, H5153, 

poppy12345

If you're under state pension age there's no sanction if you decide not to access it. As it reduces your uC £1 for £1 there would be no point accessing it if under state pension age.

oh_really

Scheme rules are nornal retirement age 60 (in a few months). Scheme member has recieved notice to inform pension administrators of their intent re lump sum and annual pension amounts. Member is receiving UC atm.

I'll try not to drip feed info but the individual concerned isn't with me and they don't "do the internet" well. If info is needed that I dont have i'll try asap.

calcotti

calcotti said:

..I think deferring the pension may be seen as deprivation of income and you could be treated as receiving it anyway.

poppy12345 said:

If you're under state pension age there's no sanction if you decide not to access it. As it reduces your uC £1 for £1 there would be no point accessing it if under state pension age.

Reviewing the guidance I think poppy is correct that in respect of pension income deferring a pension will not be seen as deprivation of income if the claimant is below state pension age.

H5170 A claimant who has reached qualifying age for SPC and has entitlement to an occupational pension but who has elected to defer payment should be treated as possessing the amount of occupational pension he could expect to receive if he applied for it1, but only from the date it could be expected to be acquired if a claim was made.

The relevant regulation is regulation 74 of the Universal Credit Regulations 2013 and this starts by saying:
 "If unearned income would be available to a person upon the making of an application for it, the person is to be treated as having that unearned income."
However it also says
"The circumstances in which a person is to be treated as possessing retirement pension income for the purposes of universal credit are the same as the circumstances set out in regulation 18 of the State Pension Credit Regulations 2002 in which a person is treated as receiving retirement pension income for the purposes of state pension credit." These latter regulations all relate to people who have reached SPC age (now the same as State Pension age) which implies that a person cannot be treated as having deprived themselves of pension income until they reach that age.

If you defer the pension beyond age 60 do you get an increased amount? If not I can't see much point in not taking it anyway even though it will reduce the UC.

oh_really

calcotti said:

If you defer the pension beyond age 60 do you get an increased amount.

Detail is not in front of me however I'll assume deferring will increase lump sum/ annual amount permutations. SPA 67.

NedS

oh_really said:

calcotti said:

If you defer the pension beyond age 60 do you get an increased amount.

Detail is not in front of me however I'll assume deferring will increase lump sum/ annual amount permutations. SPA 67.

It will depend on the scheme. I know, for example, that for the NHS 1995 scheme, which has a pension age of 60, there is no benefit to be gained from deferring. If you don't take it at 60, you lose it.

sammyjammy

NedS said:

oh_really said:

calcotti said:

If you defer the pension beyond age 60 do you get an increased amount.

Detail is not in front of me however I'll assume deferring will increase lump sum/ annual amount permutations. SPA 67.

It will depend on the scheme. I know, for example, that for the NHS 1995 scheme, which has a pension age of 60, there is no benefit to be gained from deferring. If you don't take it at 60, you lose it.

I agree this is likely the case if its a DB pension, if member is deferred the only increase will be inflationary.

oh_really

I suspect some of his concern is if he draws the pension this will end entitlement to UC and jepordise help that may be available.

kaMelo

Does not the information on p26 of the link posted apply regarding deferred pensions?
Essentially treated as having the income whether taken or not

calcotti

kaMelo said:

Does not the information on p26 of the link posted apply regarding deferred pensions?
Essentially treated as having the income whether taken or not

If you are referring to the link I posted the pages are not number - which paragraph(s) are you referring to?