Universal Credit and pension contributions

ElwoodBlues

I'm about to make a claim for UC, and currently making personal contributions to a private pension each month. I get tax relief on the pension contributions - so if I pay in £100 myself, the tax relief brings it up to £125 gross. Does UC calculation deduct my gross pension contribution from my income or net? And I presume the online calculators (Entitled To) work on the same basis, but is it net or gross that I delcare?

calcotti

UC is based on net to take into account NI, tax and pension contributions.

If your pension contributions are being directly by you then UC will almost certainly initially base your UC payments without taking these into account. You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

ElwoodBlues

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

If your pension contributions are being directly by you then UC will almost certainly initially base your UC payments without taking these into account. You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

Thanks, is that not a part of the monthly reporting that I have to provide to UC via their website anyway? I could get my employer to deduct and make my pension contributions on my behalf. But I was under the impression that would be salary sacrifice and ignored by DWP for UC calculation (i.e. they'd calculate my UC entitlement as though I have actually received the sacrificed salary)?

That's why I was doing it the other way around.

Numberwang_2

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

Spoonie_Turtle

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

"Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded."

They're wrong.  Pension contributions are disregarded whether they're before or after receiving wages. 

A couple of members have had long-running sagas of this, fighting DWP for a manual calculation every month (and often meeting incorrect responses like the above).

calcotti

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

That is incorrect. If the pension contributions are made by the claimant the process is more awkward but they should still be taken into account. The claimant will have to report the contribution and UC will have to make a manual calculation.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150813/admh3.pdf
See H3170 and H3171

(I don’t know what you have quoted from.)

Spoonie_Turtle

calcotti said:

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded.

(I don’t know what you have quoted from.)

I suspect it's a response from their journal, those often show up weirdly formatted like that.

calcotti

ElwoodBlues said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

If your pension contributions are being directly by you then UC will almost certainly initially base your UC payments without taking these into account. You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

Thanks, is that not a part of the monthly reporting that I have to provide to UC via their website anyway? I could get my employer to deduct and make my pension contributions on my behalf. But I was under the impression that would be salary sacrifice and ignored by DWP for UC calculation (i.e. they'd calculate my UC entitlement as though I have actually received the sacrificed salary)?

That's why I was doing it the other way around.

If your employer pays contributions toward pension that will be usually show on your payslip and the earnings for UC is your gross earnings minus tax, NI and pension contributions.

Or if is a salary sacrifice it presumably doesn’t show on the payslip. Salary sacrifice for some things can be added for UC but pension would not.

(As long as the pension is an approved scheme.)

Numberwang_2

calcotti said:

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

That is incorrect. If the pension contributions are made by the claimant the process is more awkward but they should still be taken into account. The claimant will have to report the contribution and UC will have to make a manual calculation.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150813/admh3.pdf
See H3170 and H3171

(I don’t know what you have quoted from.)

As spoonie_turtle says, yes that’s from the UC journal, that is their response to the question of paying in to a pension out of net income. You can say I’m incorrect and link to legislation as much as you want, but from experience (Feb to May this year) they won’t do it. Anyway this isn’t the place to discuss legislation, I’ll have R200 telling me things are gonna change for the worse in September!!  My advice to OP is get your employer to pay in the £100 per week it’s easier than debating with UC.

Spoonie_Turtle

Numberwang_2 said:

calcotti said:

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

That is incorrect. If the pension contributions are made by the claimant the process is more awkward but they should still be taken into account. The claimant will have to report the contribution and UC will have to make a manual calculation.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150813/admh3.pdf
See H3170 and H3171

(I don’t know what you have quoted from.)

As spoonie_turtle says, yes that’s from the UC journal, that is their response to the question of paying in to a pension out of net income. You can say I’m incorrect and link to legislation as much as you want, but from experience (Feb to May this year) they won’t do it. Anyway this isn’t the place to discuss legislation, I’ll have R200 telling me things are gonna change for the worse in September!!  My advice to OP is get your employer to pay in the £100 per week it’s easier than debating with UC.

They will do it … eventually, usually only after a Mandatory Reconsideration and a Decision Maker looking at the legislation every time.  I wonder if I can find the thread …
Oh, here we go.  https://forums.moneysavingexpert.com/discussion/6001734/universal-credit-and-private-pension-contributions/p1
By page 14 the poster had had to take it all the way to the Upper Tribunal(!!) but they got it sorted in the end. 
I recall some other regular members were having similar problems too but can't spend even longer seeing if those are in that thread as well.

Btw I was not at all saying you are incorrect, but that the UC workers saying pension contributions can't be deducted are incorrect.  Apologies if that wasn't clear.  Sincerely doubt you'd be lying about your interactions with them!  UC has form for the workers being plain wrong.

calcotti

Numberwang_2 said:

calcotti said:

Numberwang_2 said:

calcotti said:

UC is based on net to take into account NI, tax and pension contributions.

You will indeed to report your pension payments to UC and ask for them to be taken into account. It involves a manual adjustment to the calculatuion of your entitlement. You may have to do this every month.

If you make pension payments from your net income, then UC refuse to include in any calculations. Below response from UC regarding this question.

Any taxable income you receive from your employer has to be considered by UC, this happens automatically based on data given 
by HMRC. If the pension payment is then made after as your own choice unfortunately it cannot be disregarded. 

That is incorrect. If the pension contributions are made by the claimant the process is more awkward but they should still be taken into account. The claimant will have to report the contribution and UC will have to make a manual calculation.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1150813/admh3.pdf
See H3170 and H3171

(I don’t know what you have quoted from.)

As spoonie_turtle says, yes that’s from the UC journal, that is their response to the question of paying in to a pension out of net income. You can say I’m incorrect and link to legislation as much as you want, but from experience (Feb to May this year) they won’t do it.

It is depressing that they often get this wrong. I didn’t link to the legislation. I linked to the own DWP guidance - but they often don’t refer to it.