Why do I need to say how much pension contributions I make when applying for benefits?

Allottie

I read something about the amount you pay in pension contributions being 'discarded' when applying for benefits. What does that mean exactly?

sammyjammy

What benefits are you applying for?  Universal credit will use your income net of pension contributions as reported by your employer.

Allottie

Universal Credit, so you mean they will take the amount of pension credits away from my pay before they calculate ?

Dazed_and_C0nfused

Allottie said:

I read something about the amount you pay in pension contributions being 'discarded' when applying for benefits. What does that mean exactly?

I think it really means the exact opposite of how it sounds.

They will take into account pension contributions into account when calculating your benefits.  This is in your favour as it reduces the income taken into account for benefits purposes.

calcotti

Allottie said:

Universal Credit, so you mean they will take the amount of pension credits away from my pay before they calculate ?

I assume this means pension contributions.

For UC the earnings taken into account are your gross earnings minus income tax, NI and pension contributions.
If your pension contributions are shown on your payslips UC will be informed of these as part of HMRC Real Time Information.
If you are paying pension contributions after receiving your pay from your employer you will need to keep UC informed and will need to provide some evidence of the contributions. UC often get this wrong so if this applies be prepared to have to challenge them if they refuse to deduct them from the earnings.

mumf

I am getting statutory sick pay. Standard ,about 98 quid a week. But I-have to pay pension percentage from that too! Being very Ill I will be claiming from DSS eventually. Is the above figure from that tiny sick pay the one I use upon claim? 

sammyjammy

If you are only claiming SSP and have no other income or savings of more than £6k you should look at claiming benefits now.

calcotti

sammyjammy said:

If you are only claiming SSP and have no other income or savings of more than £6k you should look at claiming benefits now.

Specifically, Universal Credit asap. Declare a health condition supported by a Fit Note.
Also explore PIP.

consequences

calcotti said:

For UC the earnings taken into account are your gross earnings minus income tax, NI and pension contributions.
If your pension contributions are shown on your payslips UC will be informed of these as part of HMRC Real Time Information.

If pension contributions are via salary sacrifice, technically it's the employer paying the pension contributions.

So is there any need to inform UC at all about it since you yourself are not actually making any contributions, your employer is.
Your actual salary is that after the sacrifice is made.

NedS

consequences said:

calcotti said:

For UC the earnings taken into account are your gross earnings minus income tax, NI and pension contributions.
If your pension contributions are shown on your payslips UC will be informed of these as part of HMRC Real Time Information.

If pension contributions are via salary sacrifice, technically it's the employer paying the pension contributions.

So is there any need to inform UC at all about it since you yourself are not actually making any contributions, your employer is.
Your actual salary is that after the sacrifice is made.

Correct - if it's via Salary Sacrifice then you as the employee are not making any contributions so there is nothing to notify.