Relevant Earnings for Pension Contributions

bhun

I've asked this on the Benefits Forum and was advised to also post here to see if anyone knows the answer.

I claim contribution-based ESA and also have a part-time job.  I want to know if the contribution-based ESA income counts as relevant earnings in terms of how much I can pay into my private pension and still get tax relief.  At the moment I just pay into my pension up to the amount I receive from my job so that I am sure I get the tax relief payment top-ups.

Can't find anything on the internet that answers this.

Linton

Benefits do not count as earnings for pension contributions.  "Earnings" must be from employment.

bhun

Thank you.

Dazed_and_C0nfused

Agree,

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

bhun

From your link, I think it is worth pointing out:

'Relevant UK earnings means any one or more of the following types of income:

• benefits in kind which are taxable (applies to employees earning over £8,500, and to directors)'

It is technically possible to earn £8648 from employment while on Contribution-Based ESA (which is taxable).

From the gov.uk website:

'Working while you claim

You can usually work while you are claiming ESA if both of the following apply:

• you work less than 16 hours a week
• you do not earn more than £167 a week'

Does not apply to me but thought I would point that out, hoping I have understood it correctly, in case anyone else wants to know at some point.

Dazed_and_C0nfused

BIK are things like a company car or medical insurance, not DWP benefit related.

bhun

Ah, sorry.  Thanks for the clarification.

dunstonh

 At the moment I just pay into my pension up to the amount I receive from my job so that I am sure I get the tax relief payment top-ups.

Just picking up on that point.  It may be your wording but the pension contribution should be no higher than your earnings.     That means including the tax relief.   The tax relief is not on top.  

bhun

dunstonh said:

 At the moment I just pay into my pension up to the amount I receive from my job so that I am sure I get the tax relief payment top-ups.

Just picking up on that point.  It may be your wording but the pension contribution should be no higher than your earnings.     That means including the tax relief.   The tax relief is not on top.  

Yeah, my wording.  I contribute up to my earnings, including the added tax relief.