Overpaid Pension Credit?

BarleyGB

In addition to state pension, my mom has been in receipt of pension credit for a number of years, however during a recent DfW&P assessment her saving exceeded the threshold of £16000?  On this basis she is submitting statements to demonstrate when this occurred.

My mom is late 80s, not finance savvy and dependant on me to help with much of her finance (the Pension credit threshold wasn't something we thought about)

Moms account balances were historically £1000-£1500, but were boosted by a number of large bank transfers I made to her gifts/loans to help her financial security and relieve money worries etc.  The transactions can be evidenced via bank statements.  

Would DfW&P consider these as loans (they can be repaid to me) when assessing overpaid pension credit (my mom may potentially have to pay back 2-3 years worth), I made these payments to my mom to help her, obviously had we been aware of the threshold id have managed the payments accordingly.  My mom lives a very frugal life, not spending above her income.

What factors (if any) can we stress to DfW&P?  Having to repay many £000's does not seem fair in the circumstances (its almost like we've 'played the system' but in reverse).

My mom received a large equity release payment 15 years ago, a portion of this was gifted/leant to me, could I state that the recent payments to my mom was a repayment of an earlier loan?

Thank you

poppy12345

There's no maximum savings limit for Pension Credit. The £16,000 applies to working age benefits only. The savings is up to £10,000 and for every £500 or part there of over this amount there's a £1/week deduction in PC. Therefore there may not be as much of an overpayment as you think.

The money you were giving her would be classed as capital. Alot more advice including advice about the Assessed Income Period (AIP) on your other thread with the same questions you asked here. https://forums.moneysavingexpert.com/discussion/6401690/pension-credit-eligibility#latest As advised in this thread, you can't say the money you gave her was a loan if it wasn't at the time it was give and you don't have evidence that it was a loan.

Alice_Holt

There is no savings threshold for PC (unlike working age benefits).

She can still claim PC with savings of £16k, but a tariff income is assumed on savings over £10k which reduces the PC due. 

Gifts are not treated as income, but will increase capital.

I would suggest you do some research on how PC works, and the rights and responsibilities of those in receipt of PC.
Age UK has an excellent fact sheet.

Has your mum had the formal decision from the DWP indicating how much was been overpaid, and how PC are intending to recover the amount?

Is your mum in receipt of HB or CT reduction (these are passported benefits through PC), if she has no eligibility to PC then this needs addressing with her local council. There may be an overpayment resulting for these benefits as well.

Gifting amounts when an individual is receiving a means-tested benefit needs careful thought (and a good knowledge of the benefit conditions).
A better idea may be to pay for specific goods / services (i.e holidays, house repairs, etc) which enhance that person's life rather than just increasing their savings.  

The good news is that your mum has the financial means to cope with any repayments due, and her frugal lifestyle will be unaffected.

Unless you have formal loan agreements in place, the DWP will clearly take the view that you have gifted your mother these monies. I wouldn't try to ague with the DWP on this point (unless a documented legal loan agreement exists), just accept that PC has been overpaid as a consequence.

   

Alice_Holt

poppy12345 said:

There's no maximum savings limit for Pension Credit. The £16,000 applies to working age benefits only. The savings is up to £10,000 and for every £500 or part there of over this amount there's a £1/week deduction in PC. Therefore there may not be as much of an overpayment as you think.

The money you were giving her would be classed as capital. Alot more advice including advice about the Assessed Income Period (AIP) on your other thread with the same questions you asked here. https://forums.moneysavingexpert.com/discussion/6401690/pension-credit-eligibility#latest As advised in this thread, you can't say the money you gave her was a loan if it wasn't at the time it was give and you don't have evidence that it was a loan.

     Thanks poppy.

      I missed the other thread, it's annoying (and a waste of forumites time and effort) when the advice has already been given. In these case in November 2022.

   I see I have repeated myself:

  " There isn't a £16k PC threshold.

But a tariff income is applied for all savings over £10k.

Google the Age UK PC factsheets for more info.

She needs to supply the info DWP are seeking as best as she is able."


The OP seems to have ignored all the information given in that thread, including calcotti's excellent posts:

"Money from Equity release is capital while she had it.

The AgeUK factsheet Alice refers to is here
https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf
She needs to provide the information requested. An explanatory narrative about how money was used may be helpful.

DWP should have been advised when her capital went over £10.000.

DWP will then have to calculate how much income she is treated as having received from her capital on a weekly basis and her PC entitlement will then have to recalculated week by week. She will then have to repay the PC calculated as overpaid.

How much PC is she receiving?"

     

poppy12345

I agree Alice. I didn't see that thread until after i commented.

p00hsticks

Worth pointing our for others who may be in a similar situation that if the OP had simply offered to pay some of the mother's bills directly, buy their shopping, treat them to a holiday etc  rather than paying money into their bank account then the issue wouldn't have arisen.   

Alice_Holt

p00hsticks said:

Worth pointing our for others who may be in a similar situation that if the OP had simply offered to pay some of the mother's bills directly, buy their shopping, treat them to a holiday etc  rather than paying money into their bank account then the issue wouldn't have arisen.   

       Indeed, but I now  wonder if this particular situation is more complicated.

    The OP writes that their mother received a " large equity release payment 15 years ago, a portion of this was gifted/leant to me".
    According to the OP's previous thread, "An elderly, infirm but close and trusted relative has been in receipt of Pension Credit since 2008.  They were eligible when they applied."

   The DWP may be looking at deprivation of capital, and take the view that the gift of a large equity release sum was done with the clear intention of then accessing a means tested benefit.
   If the DWP suspect someone is trying to circumvent benefit law by 'clever' financial engineering, it's likely they will be more thorough in their investigations.
    
   

BarleyGB

Thank you for the advice and reference to the previous thread, my apologies I totally forgot about it and neglected to check.

Great information (on both threads), the knowledge and level of detail is very very helpful.

DWP have not yet assessed or given a decision, the documents I submitted last year were never received its only now that they have followed up.  Im going through the process of submitting bank statements again.

bengal-stripe

If your mother is in her late 80s today, she would have been older than 75 in 2016. That means she would have been in an 'assessed income period' which was no longer reviewed in 2016. People over the age of 75 were granted an unlimited period to end of life. Although the standard 5-jears period was not renewed again (or prematurely closed), those who had been granted an indefinite period, did not lose that and are entitled for the rest of their life.

Do check in your mother's paperwork the decision about the amount of Pension Credit for the coming financial year (issued sometime in March). Is she entitled to an 'indefinite assessed income period'?