Pension Credit - when to notify of 'excess' savings

scottleag

Late last year my wife was awarded PIP. This resulted in a number of inter-related backdated payments. First we received her PIP backdated to date of original claim. As a consequence we became eligible for increased housing benefit and council tax rebate, both backdated to her original pip claim and received separately. Finally, during the course of the wait for the outcome of her PIP claim she reached retirement age. I hit that mark six months previously and was already in receipt of PIP so we became eligible for Pension Credit, backdated to her 66th birthday. 

So between early December 2022-late January 2023 we received four backdated sums. I'm aware there is a twelve months 'grace' period when backdated payments are disregarded as savings for purpose of calculation of housing benefit, council tax and pension credit. Our problem is we have four different dates on which that twelve months 'grace' expires. We will almost certainly exceed the £10K savings limit either before or during the time when these periods expire and we are unsure of when to report this to the Pension Service. 

Is it the moment we hit over £10K? In which case we could go over the limit one week but find ourselves temporarily under the limit the following week if it's our big one when rent and a number of other regular monthly payments are made. We'd then go over the limit again a week or two later.

Is it when the first 'grace' period expires if we are over the limit then? If so then would the Pension Service start to reduce Pension Credit immediately based on excess of £10K savings or would they discount the remaining grace periods? When, as now, - all four grace periods are applicable - the total sum of our backdated payments are exempt from consideration of savings it means we can have close to £14.5K in savings unaffected. This would reduce as each 'grace' period expires to £12.5K, £12.2K, £12.1K and finally to £10K when the final backdated payment hits twelve months. 

Or would we have to notify them of the expiration of each and every 'grace' period, i.e. make four separate notifications between early December this year till late January 2024?

Or do we wait until the final 'grace' period expires?

Regardless of the correct time to notify the Pension Service would we have to notify the council separately or does the DWP do this?

It's all very confusing and we want to keep things right. Any advice - particularly from anyone who has been in a similar situation in the past - appreciated.

Thanks

Newcad

scottleag said:

we could go over the limit one week but find ourselves temporarily under the limit the following week if it's our big one when rent and a number of other regular monthly payments are made. We'd then go over the limit again a week or two later.

Hi scotleag,

Fluctuations like that are not all 'savings/capital'.

Some of it is savings yes, but the part that is fluctuating is normal income and outgoings and not counted as savings.

Generally any regular money coming in, wages, benefits, pension(s) is income and gets spent on your living costs, it only becomes saving/capital if it is not spent before the next payment (for the same thing) comes in.

You will have seen in the past (Youreable) that I often advise it can be best to seperate the two things - have a current account for your regular payments in/out, and a seperate account for your savings - it makes it a lot simpler for you (and the DWP/council) to then see which is which.

Your current account will go up/down with payments in/out as you get money and pay bills, the savings will stay relatively stable.
If you find you arent spending all your income and start to build up a balance in the current account then move the build up into the savings.

As for the backpayments and disregards ; each one should be disregarded from the date it was paid, so as you say the disregards will end on different dates.

To be practical I think that what I would do is -
On the savings (not the fluctuating in/out normal spending) approaching the limit, say £500 below, I would inform them of the savings, giving details of what each backpayment was for and the date it was received.
Let them sort out the various disregard periods, they are going to do that anyway for their calculations, and of course check what they say/calculate and if it doesn't look right then challenge/ask for an explanation.

And yes, you will need to tell the council as well as the DWP.
(Plus some councils can be funny and you may have to tell both the HB and the CT departments seperately).
Be aware that the council may have different savings limits to the DWPs, and they may have different savings limits for HB and CT.
You should check on your councils website what their particular limits for each are.

scottleag

Sound advice as always Nuke. Thank you. I'm thinking of writing to the DWP shortly before the first disregard expires outlining what the situation is at that point WRT current account and savings, giving dates of receipt of back payments (they'll have a record of PIP and PC but not HB & CT which were issued by the council) and then leaving the ball in their court.

One thing I'm unsure about is how much to leave in the current account, given there are fixed monthly payment dates for most things but incoming payments are four-weekly so fall on the same DAYS each month but different DATES. Obviously I know how much goes out in committed monthly payments and can broadly estimate for food, clothing, travel etc but I don't know what would be regarded as sufficient 'cover' which would avoid being considered as capital. In the past I've operated on the basis of having AT LEAST twice the regular monthly outgoings in the current account at any given point so as to allow payments to be made in the event of any problem regarding payments without becoming overdrawn or having a payment refused. Whether that's acceptable in the eyes of the DWP or regarded as excessive I've no idea. 

Another issue is what to do after the final disregard if savings continue to rise. My wife and I are unable to get out and about far less than we did pre-Covid so it's a distinct possibility savings will grow. I realise this is not the usual sort of issue people on benefits have and that many may consider us lucky to have this as a problem though I would counter that we'd rather be skint and healthy. I'm thinking along the lines of informing them if and when savings rise by £500 after the final disregard expires as this is the point at which pension credit starts to fall (£1 pw for each £500 above £10,000 in savings). 

I shall take your advice re the council though the funny thing is it doesn't seem to affect HB and CT. I've been on the EntitledTo and Turn2Us benefits calculators and both say we would continue to receive the same in HB and CT as now. Even when putting in notional figures at different savings levels including in excess of £16,000 there is no reduction. This appears to be because our 'assessed income' (state pension x2, + 'assumed' income from savings) stays below the applicable amount (personal allowance + SDP higher rate + carer premium) and that remains the case as long as we are in receipt of ANY pension credit). Nevertheless it seems prudent to notify them at the same time as the DWP.

One final point re calculators. EntitledTo and Turn2Us show exactly the same figures and outcomes all the way along the line except for pension credit. Inputting exactly the same figures to both calculators shows EntitledTo coming to exactly the same as per DWP letters but Turn2Us is significantly less. Something to be borne in mind when using benefits calculators

scottleag

Sorry, Para 3 lines 1 & 2 should read "My wife and I are ABLE to get out and about far less than we did pre-Covid"

Newcad

I agree that leaving twice the monthly outgoings in the account (if you can) could be sensible, but I'm also not sure just how the DWP would regard that.

Although I lean towards them regarding it as savings if it isn't being spent and is always there as a minimum balance.

It might be better to start paying a bit extra to get each of your regularly paid accounts into a months credit, that way it is sat in the company's bank accounts and not yours.
Or as the money appears to be sat in your account already make an extra months manual payment to each one, you can do that even if you normally pay by Direct Debit, and then still make your regular monthly payments as normal.

As a bonus that also covers any techinical problems at your bank as well as problems at the DWP.
If the bank doesn't pay the company on time for some reason your account with the company is already in credit.

I have no doubt that once you are near, or above, the savings limit the DWP will want regular updates on your savings, so informing them yourself when going across a £500 savings increment would also be sensible.

I'm not entirely sure about the pensioner HB and CT, but as you say you are probably 'passported' to full relief from Pension Credit.

As for not spending all your income and so savings accumulating - the best I can suggest is to spend more each week/month and treat yourselves?

scottleag

Thanks again. Not so happy about handing extra cash out to landlord, energy provider etc but it'll probably save £2 pw if I do and I take your point. Instead of having the money always in the current account it's been paid upfront in advance. If I've understood the calculators correctly we get full HB & CT as long as we get ANY amount of pension credit. Even if it was less than £1 pw.

We do try to have the occasional treat but still feel guilty (my wife particularly) about doing so and salve our consciences with direct debits to food banks and homeless charities and respond to any DEC appeals. As I said, I know this isn't the normal sort of problem people have wrt benefits but life has dealt us a !!!!!! hand these past six years or so and we're not receiving anything we're not entitled to. I'll write to the DWP and council (separately to HB & CT) showing balances before the first disregard runs out and voluntarily offer to update them if - and it is an if - our savings grow by £500 after the end of the final disregard then just take it from there.

That way all official bodies have been kept fully informed of our circumstances. 

scottleag

This site is ultra-sensitive isn't it? Those exclamation marks are a word similar to skitty. Don't tell me we're going back to the bad old days of not being able to write Arsenal or Scunthorpe. 

Spoonie_Turtle

scottleag said:

We do try to have the occasional treat but still feel guilty (my wife particularly) about doing so and salve our consciences with direct debits to food banks and homeless charities and respond to any DEC appeals. As I said, I know this isn't the normal sort of problem people have wrt benefits but life has dealt us a !!!!!! hand these past six years or so and we're not receiving anything we're not entitled to.

This board isn't for moralising but since you brought up feeling guilty - I'm sure you already know, but just some reassurance that you really have no reason to.  You're entitled to those benefits because of your circumstances, and just because there are other people who don't enjoy the same financial comfort doesn't mean you should feel guilty. 

And that's the case anyway, but even more so since you give a chunk of your spare income to people needing help.

Please try not to feel guilty about using your income on treats, not just necessities.  It's your money to use as you wish and as you're already restricted in what you can do and how you can enjoy your lives, there's no need to impose further restrictions on yourselves through guilt.  (Although I do truly understand, I'm in a similar position due to debilitating illness and a couple of layers of privilege and do find it hard when I hear how other people are struggling.)  Feeling guilty doesn't help change other people's circumstances, beyond the limited good our financial donations can do.

Anyway, best wishes to you and your wife.

scottleag

Thank you very much for this. I really appreciate it and it's re-assuring to know we're not the only ones in these circumstances. What you say is absolutely right of course. We're both now retired and those 'golden years' we weren't exactly looking forward to but were determined to enjoy have turned out no so golden after all. I'm relatively okay with things. I know we receive - to use DWP speak - "what the government says is enough to live on" and while we try and do something to help others my wife still feels really uncomfortable about things. When she received her back payment for PIP and then our pension credit award she repeatedly asked if the DWP had made a mistake. I think it's because she has seen me struggle with long-term but not life-threatening disabilities while she had always been perfectly healthy.  Then out of the blue sixteen months ago just two months after I retired and four months shy of her own retirement she suddenly took ill and was diagnosed with a treatable but incurable illness. I keep saying we receive only we're entitled to. Not a penny more but not a penny less either. That this is not good fortune, it's on account of HER illness. If she were still healthy she wouldn't be receiving PIP and despite my conditions we wouldn't get a penny pension credit nor full housing benefit and council tax rebate. It's the blow that fate has dealt her that's responsible for us receiving these payments. 

Thank you for your best wishes and please accept mine in return.

Newcad

Remember that before we had a chat on the other forum you 'weren't going to bother' claiming PIP for your wife but were going to wait until she retired and then claim AA instead.

If you had done that then she would't have got the Enhanced Mobility PIP so would have less money, and you wouldn't have got the 'passported' PC, HB, and CTR until she had then later claimed AA.

Don't feel guilty about making the PIP claim when you did and so getting all that she is (you both are) entitled to.

scottleag

Absolutely right that was what we were going to do as neither of us wished my wife to undergo the same horrendous treatment I received at PIP interview and she was not well enough anyway to attend any interview and she dreaded the prospect of going to tribunal. You may recall that I had to go to tribunal to win my PIP award (and some years previously for working tax credit too) In the end we followed your (and others) advice. Fortunately she had a very sympathetic telephone interview instead.

Yes, she would have lost enhanced mobility PIP but it wouldn't have made any difference to PC, full HB and CTR as full awards for the latter two are dependent on receiving the first and PC can only be claimed from her 66th birthday regardless of date of PIP award. We put in the PC claim on her 66th birthday and would have done the same with attendance allowance as that too can only claimed from 66th birthday. Presuming she would have been awarded AA (and as she was awarded standard daily living rate for PIP I think that's a fair assumption) then both AA and PC would have been backdated to her birthday and HB and CTR would have followed. It would just have taken a little longer.

I'm feeling less guilty as time goes on because I know my wife isn't going to make some miraculous recovery and my own conditions are worsening too. We should be enjoying life as much as we can for as long as we can.