pension contributions and universal credit

itsocomplex

I know that this has been asked before, but I need clarification here - my husband pays into an occupational pension (NHS) taken out pre tax and NI and then from his wages he pays into a private Scottish widow pension - UC say this isn't deductable

Marcon

See https://www.entitledto.co.uk/help/pension-contributions which should answer your question. 

itsocomplex

I have done that and I have deducted his private pension thinking it is allowed however the UC manager states not

calcotti

itsocomplex said:

I have done that and I have deducted his private pension thinking it is allowed however the UC manager states not

They are wrong. He is allowed to have the pension contributions deducted from his earnings but UC are often unaware of this. If he isn’t getting anywhere he can request a Mandatory Reconsideration of the decision not to allow these deductions which will mean someone else looks at the matter.

There is no restriction on whether or not the pension contributions or made direct from salary or paid directly by the claimant.

However UC will have to manually alter the payment every month because the UC software can’t, as I understand it, do this automatically. 

https://www.legislation.gov.uk/uksi/2013/376/regulation/55
Universal Credit regulations 2013 Regulation 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;

itsocomplex

Thank you so much for that information

Albermarle

calcotti said:

itsocomplex said:

I have done that and I have deducted his private pension thinking it is allowed however the UC manager states not

They are wrong. He is allowed to have the pension contributions deducted from his earnings but UC are often unaware of this. If he isn’t getting anywhere he can request a Mandatory Reconsideration of the decision not to allow these deductions which will mean someone else looks at the matter.

There is no restriction on whether or not the pension contributions or made direct from salary or paid directly by the claimant.

However UC will have to manually alter the payment every month because the UC software can’t, as I understand it, do this automatically. 

https://www.legislation.gov.uk/uksi/2013/376/regulation/55
Universal Credit regulations 2013 Regulation 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;

Interesting. So in theory someone borderline ineligible for UC, could contribute to a pension and get some UC?
In other words the UC would be funding the pension contributions indirectly?

itsocomplex

I was told they arent allowed to alter the earnings to reflect this as it was what HMRC have advised them, it cant be overridden?  Just for my info what is a relievable contribution?

xylophone

 relievable contribution?

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

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

WillowCat

It was like pulling teeth to get my contributions recognised.  It took six months, a mandatory reconsideration (which was ignored/not processed) and finally the involvement of my MP to get them to agree.  They did however then go back and recalculate each month's statement.  They then kicked off again a year later when I did a special project and put all my overtime into my pension as they considered it 'too much'.  That took less time to solve as I was able to speak to the decision maker directly who agreed the legislation allowed it.

So, yes, it is allowed, and yes it does have to be reported each month and then your statement manually recalculated.  I now take the easy life and as my employer runs a relief at source scheme I simply tell them each month how much to pay (pretty much everything down to my work allowance), HMRC get all the figures and UC are none the wiser.  Down side is it's going into Nest not my main pension.

Dazed_and_C0nfused

itsocomplex said:

I was told they arent allowed to alter the earnings to reflect this as it was what HMRC have advised them, it cant be overridden?  Just for my info what is a relievable contribution?

Personal pension contributions wouldn't reduce the earnings from a particular employment. 

They would however be part of the calculation of a UC award.

itsocomplex

Thank you all so much for your guidance.  I do have another question and Im not sure if anyone can help - I think I remember reading that any meal allowance was deductible as well, does anyone know where the documentation is to support this - is of course I am correct