Can UC force me to reduce my pension contributions?

calcotti

CRAIGSVILLE1 said: Just had a look about MIF ( didn't know about this)  It's not very kind towards full time self employed people, who don't earn much, but love their job ( dog walker she is )  It kind of tries to force people to look for a different job, just to earn more, even if they don't want a different job ??? 

The benefit system is not intended to support people who are carrying out an activity from which they cannot support themselves indefinitely. It is indeed designed to make people look for work which will provide a living.

poppy12345

CRAIGSVILLE1 said:

  It's not very kind towards full time self employed people, who don't earn much,

Yet she's paying more than half of her earnings into the SIPP...

CRAIGSVILLE1

poppy12345 said:

CRAIGSVILLE1 said:

  It's not very kind towards full time self employed people, who don't earn much,

Yet she's paying more than half of her earnings into the SIPP...

If she didn't, she would be working the rest of her life. She's only put into her pension since I told her to 🤪 She's quite frugal, and I personally I think 50% is ok at 55 with hardly anything in it already?

CRAIGSVILLE1

Alice_Holt said:

As she is your 'OH', is it a joint UC claim.

Or is she claiming as a single person? 

No, we live in separate homes. Distance, kids, and my job , so we have separate finances

CRAIGSVILLE1

calcotti said:

CRAIGSVILLE1 said: Just had a look about MIF ( didn't know about this)  It's not very kind towards full time self employed people, who don't earn much, but love their job ( dog walker she is )  It kind of tries to force people to look for a different job, just to earn more, even if they don't want a different job ??? 

The benefit system is not intended to support people who are carrying out an activity from which they cannot support themselves indefinitely. It is indeed designed to make people look for work which will provide a living.

Yep, I understand this, but she does support herself, never spending to excess  and she doesn't want to be on UC, been working for most of her life without being on UC , and wouldn't be on it it, if I never pushed her to ask for it.

calcotti

CRAIGSVILLE1 said:.. but she does support herself, ...she doesn't want to be on UC, 

If she is on UC she is not supporting herself.

CRAIGSVILLE1 said:..and wouldn't be on it it, if I never pushed her to ask for it.

Sounds like you didn’t do her any favours by pushing her this way.

CRAIGSVILLE1

calcotti said:

CRAIGSVILLE1 said:.. but she does support herself, ...she doesn't want to be on UC, 

If she is on UC she is not supporting herself.

CRAIGSVILLE1 said:..and wouldn't be on it it, if I never pushed her to ask for it.

Sounds like you didn’t do her any favours by pushing her this way.

She doesn't have to be on it, as she is, and has been very frugal, but any extra she is entitled to claim for , I'm all for it, and would make her life a little bit easier.
She has had a low paying job most of her life, never claimed for anything, even though she probably could have in the past.
I'm only trying to get her a little bit extra for her latter years before retiring.

I'm sure you would be the same in her situation ??? 

Spoonie_Turtle

CRAIGSVILLE1 said:

calcotti said:

CRAIGSVILLE1 said:.. but she does support herself, ...she doesn't want to be on UC, 

If she is on UC she is not supporting herself.

CRAIGSVILLE1 said:..and wouldn't be on it it, if I never pushed her to ask for it.

Sounds like you didn’t do her any favours by pushing her this way.

She doesn't have to be on it, as she is, and has been very frugal, but any extra she is entitled to claim for , I'm all for it, and would make her life a little bit easier.
She has had a low paying job most of her life, never claimed for anything, even though she probably could have in the past.
I'm only trying to get her a little bit extra for her latter years before retiring.

I'm sure you would be the same in her situation ??? 

No judgement here whatsoever, I am simply curious - if she weren't claiming UC how would she be surviving?  Would her income be just about sufficient due to her frugality?
(My stance is always that if people are entitled to support then they should be getting it.  However as pointed out earlier in the thread, it might become a bit more complicated for her once the MIF is imposed.  It's possible she may end up better off trying to find higher paid employment, which is sort of the point of the MIF.)

Dazed_and_C0nfused

She has had a low paying job most of her life, never claimed for anything, even though she probably could have in the past.

No, we live in separate homes. Distance, kids, and my job , so we have separate finances

If they're her kids she would have been better off claiming Child Benefit.

Pointless making life harder for yourself than it needs to be.

NedS

calcotti said:

tomtom256 said: Any allowable expenses have to be reasonable, if deemed to be excessive, they can decide the expenses are not allowable.

I’m not sure that the pension contributions come into the category of expense (allowable or otherwise) even though they are taken into account when working out the net earnings.

I agree that pension contributions are not an expense, and they are explicitly allowable as written in legislation...

calcotti said:

The issue isn’t confined to the self employed. In theory an employed person could pay, within HMRC rules, a large portion of their wage such into a pension and thereby gain more UC. For that reason It may not be helpful to think of this specifically in terms of what is reasonable for a self employed person.

But I do see this as purely a self-employed issue - or rather one only affecting self-employed people.

For someone who is employed, the regulations explicitly allow for the deduction of all relievable pension contributions, so under the law anyone can freely pay 100% of their salary (up to the annual allowance of £40k, or more with carry forward) into their pension and receive increased UC as a result, and there is nothing UC can do about that as it's written in legislation.

In this case, it's about the claimant being self-employed and in their start up period where the MIF has been waived for 12 months. The conditions for waiving the MIF for 12 months are that the claimant is taking all reasonable steps to increase their self employed earnings (after tax, NI and pension deductions) to meet their MIF target at the end of the 12 month period. If they are not deemed by the work coach to be taking all reasonable steps, the work coach can end the start up period and apply the MIF immediately, thus nullifying the pension contributions. The work coach in this case has clearly taken a view that by contributing a large proportion of their earnings into their pension, they are not taking all reasonable steps to maximise their income for UC purposes. UC cannot prevent the person making large pension contributions as that is explicitly allowed (as per employed workers above), but they can immediately impose the MIF nullifying the effect. In this case it would appear the work coach is attempting reason and trying to find some middle ground around what level of contributions may be reasonable.