Pension Credit and impact of savings amount change

calcotti

In truth I think the SP amounts supplied are unlikely to be correct.

ahmjt

Really appreciate your replies so far.

Below is a brief of how PC has been worked out (from the DWP letter)

1. APPROPRIATE AMOUNT:
£306.85

2. INCOME:

BENEFITS:
SP father 72.45 Q

SP mother 33.88 Q

OTHER INCOME

Work related pension 53.22 Q

Savings and investment of 12381.53 giving £5.00 Q

TOTAL INCOME £164.55

3. GUARNTEE CREDIT

APPROPRIATE AMOUNT minus TOTAL INCOME = 142.30

4. SAVINGS CREDIT

No savings credit

5. YOUR PENSION CREDIT 142.30 (from 10 April 2023)

Income from savings should be £44 instead of £5. Also I need to inform DWP with new amount of work pension.

My parents state pension amount is low as they did not work in the UK for big part of their working life. 

I tried using EntitledTo website and the amount comes roughly to what @xylophone has mentioned.

Keep_pedalling

ahmjt said:

Thanks @calcotti for your detailed reply. I will need to find out details from my parents. As they live with us they have almost zero spending except occasional holiday trips (hence getting more than 500 each month). I think my dad's SP is 260/month, my mom's SP is 129/month. Their PC was 118/week which was recently raised to 140/week. They have not applied for HB or CRT. I need to get the breakdown for guarantee PC and saving PC. I have to write up to DWP asap with details and let them adjust.

Their saving would not increase so rapidly if they started paying you a contribution to your household expenditure.

ahmjt

Keep_pedalling said:

Their saving would not increase so rapidly if they started paying you a contribution to your household expenditure.

Paying for household expenditure in Asian families is a contentious issue and is never discussed   

calcotti

They are very low State Pensions but you’ve explained why.

The calculation is for the year from April 2023. The calculation is correct based on the figures used.

Your parents may have had an Assessed Income Period (AIP) during which time changes would have been ignored but your best course of action is to do exactly what you propose - report the changes and supply DWP with any information they request. As advised earlier DWP are likely to want to see total capital over the whole time period since it was last reported and details of how much the pension has increased each year (there have presumably been annual increases).

They may suspend payments while they review the claim. 

If an overpayment has occurred they would usually recover by reducing future payments but in your parents case they may prefer to pay in one go from their savings. Not only would this get rid of the debt but, because the capital would be reduced, the future deductions for notional income from capital would be reduced (you would need to confirm the capital amount remaining).

It would be worth checking previous PC letters (if you have access to them) to see if there is any reference to an AIP. More information here
https://www.entitledto.co.uk/help/assessed-income-period
If an AIP applied changes would not affect the PC payable during the AIP. 

As I understand it, if the claim started before April 2016 and one of them is over 75 there may be an indefinite AIP in which case the increases in pension and capital will make no difference. If there is the PC letter should say so. If there is no reference to an AIP then there isn’t one.

Should you wish to refer to it there is detailed guidance on PC here
https://www.gov.uk/government/publications/pension-credit-technical-guidance/a-detailed-guide-to-pension-credit-for-advisers-and-others#assessed-income-period

xylophone

As I understand it, if the claim started before April 2016 

OP states

My parents currently receive pension credit. When I helped them to apply for it three years ago 

2019/20?

According to entitled to   https://www.entitledto.co.uk/help/assessed-income-period

Since April 2016, no new Assessed Income Periods have been set meaning changes to your income and capital must be notified in the usual way. 

As you say, best for OP to check the situation with DWP.

ahmjt

I have found the first PC letter now. The claim officially started from 7 Oct 2020. Dad's d.o.b is1935 and Mom's d.o.b. is 1943. I can't see any information about AIP there. The savings amount at that time was £12381.53 which is what DWP used again in recent re-calculation. Best to write to DWP and leave to their judgement but I will keep an eye on the outcome. Thanks all for your help.

calcotti

I’d forgotten the claim wasn’t very old when I mentioned AIP. I think I mixed it up with another thread. Definitely no AIP and a ‘red herring’ - my apologies for that.

DWP will use the same capital amount until advised that it has changed. 

Because there has been a big change and obviously hasn’t changed in one go they will need bank statements from the start of the claim until now and confirmation of when work pension rose and by how much. They will recalculate entitlement for each week of the claim and compare it with what was paid in order to work out the overpayment.

ahmjt

Just a follow-up on this. Last week my father received  a letter that DWP will be contacting soon to get up-to-date figures for savings and incomes.