Universal credit and pension contributions.

NedS

justwhat said:

NedS said:

Booboop123 said:

I have just migrated over to universal credit and I am employed and self employed.
i voluntarily pay towards my works pension and I don't pay tax there but I'm guessing it's a relief at source pension as the pension provider claims the tax relief.
i then pay into a private pension so that's a relief at source(pay after tax).
so the benefits calculators seem to take both pensions into account but come across some questions on here that say they don't take the private.
anyway my works pension , do I submit or do they take it into account already? 

What about the tax relief?
my private pension ... I was told I add this as expenses?  And do I input it with or without tax relief?
long winded but cont really find anything on if I add the tax relief or not.
thanks 

Your works pension should already be taken into account, as UC is based on your net take-home pay

For your self employment, when asked to report your income and expenses each month, there is a box for you to enter any pension deductions - here you enter the net amount - the amount you have actually paid into the pension before any tax relief.

If pension contributions are entered into the SE section it cannot be offset against PAYE.?

Eg.
SE earnings £1000
PAYE £1000
Pension contribution entered into SE Section £1600. If entered into the SE section , the system NIL's the SE earnings and does not let you carry the 600 pound across as a deduction from PAYE.


  

Correct - the UC system treats S/E earnings and PAYE earnings as two completely separate things.

Any pension contributions entered against S/E earnings will only affect those S/E earnings, and not any PAYE earnings (same as any S/E losses would not carry across to any PAYE earnings). If you contribute more than you have earned (or profit made) in an assessment period, it will only reduce those earnings to zero in that AP.

justwhat

NedS said:

justwhat said:

NedS said:

Booboop123 said:

I have just migrated over to universal credit and I am employed and self employed.
i voluntarily pay towards my works pension and I don't pay tax there but I'm guessing it's a relief at source pension as the pension provider claims the tax relief.
i then pay into a private pension so that's a relief at source(pay after tax).
so the benefits calculators seem to take both pensions into account but come across some questions on here that say they don't take the private.
anyway my works pension , do I submit or do they take it into account already? 

What about the tax relief?
my private pension ... I was told I add this as expenses?  And do I input it with or without tax relief?
long winded but cont really find anything on if I add the tax relief or not.
thanks 

Your works pension should already be taken into account, as UC is based on your net take-home pay

For your self employment, when asked to report your income and expenses each month, there is a box for you to enter any pension deductions - here you enter the net amount - the amount you have actually paid into the pension before any tax relief.

If pension contributions are entered into the SE section it cannot be offset against PAYE.?

Eg.
SE earnings £1000
PAYE £1000
Pension contribution entered into SE Section £1600. If entered into the SE section , the system NIL's the SE earnings and does not let you carry the 600 pound across as a deduction from PAYE.


  

Correct - the UC system treats S/E earnings and PAYE earnings as two completely separate things.

Any pension contributions entered against S/E earnings will only affect those S/E earnings, and not any PAYE earnings (same as any S/E losses would not carry across to any PAYE earnings). If you contribute more than you have earned (or profit made) in an assessment period, it will only reduce those earnings to zero in that AP.

i am unsure what happens in above scenario if a manual adjustment is done , Eg. if pension contributions are  NOT entered into the SE Section. Would the negative PAYE/pension contributions wipe out some of the SE income.

dul50n

UC legislation states that:

"A person’s self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person’s share of those profits) of the trade, profession or vocation and deducting from that amount—

any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person’s employed earnings)"

So it doesn't matter what the source of earnings is, be it employment or self-employment, pension contributions should be deducted from total income one way or another

The problem is getting a mandatory reconsideration carried out so that somebody does a manual recalculation

Five months in, five mandatory reconsideration requests and I'm still waiting for any reply

NedS

justwhat said:

NedS said:

justwhat said:

NedS said:

Booboop123 said:

I have just migrated over to universal credit and I am employed and self employed.
i voluntarily pay towards my works pension and I don't pay tax there but I'm guessing it's a relief at source pension as the pension provider claims the tax relief.
i then pay into a private pension so that's a relief at source(pay after tax).
so the benefits calculators seem to take both pensions into account but come across some questions on here that say they don't take the private.
anyway my works pension , do I submit or do they take it into account already? 

What about the tax relief?
my private pension ... I was told I add this as expenses?  And do I input it with or without tax relief?
long winded but cont really find anything on if I add the tax relief or not.
thanks 

Your works pension should already be taken into account, as UC is based on your net take-home pay

For your self employment, when asked to report your income and expenses each month, there is a box for you to enter any pension deductions - here you enter the net amount - the amount you have actually paid into the pension before any tax relief.

If pension contributions are entered into the SE section it cannot be offset against PAYE.?

Eg.
SE earnings £1000
PAYE £1000
Pension contribution entered into SE Section £1600. If entered into the SE section , the system NIL's the SE earnings and does not let you carry the 600 pound across as a deduction from PAYE.


  

Correct - the UC system treats S/E earnings and PAYE earnings as two completely separate things.

Any pension contributions entered against S/E earnings will only affect those S/E earnings, and not any PAYE earnings (same as any S/E losses would not carry across to any PAYE earnings). If you contribute more than you have earned (or profit made) in an assessment period, it will only reduce those earnings to zero in that AP.

i am unsure what happens in above scenario if a manual adjustment is done , Eg. if pension contributions are  NOT entered into the SE Section. Would the negative PAYE/pension contributions wipe out some of the SE income.

Regardless of what the legislation says, the UC system treats S/E and PAYE earnings completely separately, so losses from S/E earning are not offset against any PAYE earnings (potentially from a different employer). This includes treating pension conts separately. That's just the way the system has been programmed to work.

I would suggest that if the following situation were to apply:

£1000 PAYE net earnings

£1000 S/E profit after expenses

£1600 total pension conts in the AP

assuming the MIF does not yet apply, that £1000 pension conts are declared against the S/E earnings reducing these earnings to zero (you can do this in the declaration and it's immediately actioned), and the balance of £600 is made as a separate contribution within the AP and reported against the PAYE earnings, which will require submission of evidence and a MR to get the RTI earnings feed corrected.

justwhat

dul50n said:

UC legislation states that:

"A person’s self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person’s share of those profits) of the trade, profession or vocation and deducting from that amount—

any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person’s employed earnings)"

So it doesn't matter what the source of earnings is, be it employment or self-employment, pension contributions should be deducted from total income one way or another

The problem is getting a mandatory reconsideration carried out so that somebody does a manual recalculation

Five months in, five mandatory reconsideration requests and I'm still waiting for any reply

3 entries in journal 2 phone calls since Monday to UC helpline.. And just been informed MR has gone to decision maker. 

dul50n

justwhat said:

dul50n said:

UC legislation states that:

"A person’s self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person’s share of those profits) of the trade, profession or vocation and deducting from that amount—

any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person’s employed earnings)"

So it doesn't matter what the source of earnings is, be it employment or self-employment, pension contributions should be deducted from total income one way or another

The problem is getting a mandatory reconsideration carried out so that somebody does a manual recalculation

Five months in, five mandatory reconsideration requests and I'm still waiting for any reply

3 entries in journal 2 phone calls since Monday to UC helpline.. And just been informed MR has gone to decision maker. 

.... and that's where everything stops

You need a decision and if it's the wrong decision, then and only then can you complain to the Independent Case Examiner, go to Tribunal or refer to the Parliamentary Ombudsman

My first mandatory reconsideration was referred to a decision maker five months ago and nothing has happened

In my opinion the DWP are taking advantage of a flaw in the UC system, abusing the complaints procedure, unlawfully witholding payment and hanging people out to dry

spaniel101

dul50n said:

justwhat said:

dul50n said:

UC legislation states that:

"A person’s self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person’s share of those profits) of the trade, profession or vocation and deducting from that amount—

any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person’s employed earnings)"

So it doesn't matter what the source of earnings is, be it employment or self-employment, pension contributions should be deducted from total income one way or another

The problem is getting a mandatory reconsideration carried out so that somebody does a manual recalculation

Five months in, five mandatory reconsideration requests and I'm still waiting for any reply

3 entries in journal 2 phone calls since Monday to UC helpline.. And just been informed MR has gone to decision maker. 

.... and that's where everything stops

You need a decision and if it's the wrong decision, then and only then can you complain to the Independent Case Examiner, go to Tribunal or refer to the Parliamentary Ombudsman

My first mandatory reconsideration was referred to a decision maker five months ago and nothing has happened

In my opinion the DWP are taking advantage of a flaw in the UC system, abusing the complaints procedure, unlawfully witholding payment and hanging people out to dry

There are also plenty out there for whom it works correctly for.

I request 'upload' function every month, request MR along with evidence uploaded (stating legislation), decision made, statement recalculated and reimbursement within a week to 10 days (and my private pension contributions are a significant portion of my salary).



I would be insistent in your position, every 2 days, phonecalls, complaints, MP, more phonecalls, more complaints.  Have you tried requesting a different Case Manager too?

dul50n

spaniel101 said:

dul50n said:

justwhat said:

dul50n said:

UC legislation states that:

"A person’s self-employed earnings in respect of an assessment period are to be calculated by taking the amount of the gross profits (or, in the case of a partnership, the person’s share of those profits) of the trade, profession or vocation and deducting from that amount—

any relievable pension contributions made by the person in the assessment period (unless a deduction has been made in respect of those contributions in calculating a person’s employed earnings)"

So it doesn't matter what the source of earnings is, be it employment or self-employment, pension contributions should be deducted from total income one way or another

The problem is getting a mandatory reconsideration carried out so that somebody does a manual recalculation

Five months in, five mandatory reconsideration requests and I'm still waiting for any reply

3 entries in journal 2 phone calls since Monday to UC helpline.. And just been informed MR has gone to decision maker. 

.... and that's where everything stops

You need a decision and if it's the wrong decision, then and only then can you complain to the Independent Case Examiner, go to Tribunal or refer to the Parliamentary Ombudsman

My first mandatory reconsideration was referred to a decision maker five months ago and nothing has happened

In my opinion the DWP are taking advantage of a flaw in the UC system, abusing the complaints procedure, unlawfully witholding payment and hanging people out to dry

There are also plenty out there for whom it works correctly for.

I request 'upload' function every month, request MR along with evidence uploaded (stating legislation), decision made, statement recalculated and reimbursement within a week to 10 days (and my private pension contributions are a significant portion of my salary).



I would be insistent in your position, every 2 days, phonecalls, complaints, MP, more phonecalls, more complaints.  Have you tried requesting a different Case Manager too?

Yes I fully agree and I have been insistent, not quite every 2 days though, my time is more valuable than that

I'm more in favour of playing them at their own game and "giving them enough rope to hang themselves" to go back for compensation after resolution is reached months later

As it happens, out of sheer frustration, I wrote to the Independent Case Examiner last Thursday, without the necessary final response, partly to vent my spleen again and to protest against the DWP's shortcomings

It's probably pure coincidence but by the end of Friday I was given an upload link and a note on the journal that my complaint had been escalated

Today I've had the official response from the ICE saying that they cannot examine my complaint without a final response, which I fully expected, but I'd like to think that they might have given somebody a shove somewhere

Bottom line though, this situation shouldn't even exist if there are plenty out there for whom it works correctly

The DWP are either utterly incompetent or they are taking advantage of a flaw in the system in the hope that people won't realise or pursue it

NedS

dul50n said:

Yes I fully agree and I have been insistent, not quite every 2 days though, my time is more valuable than that

I'm more in favour of playing them at their own game and "giving them enough rope to hang themselves" to go back for compensation after resolution is reached months later

DWP will not compensate you for their failings. At best, they will pay you the amount of money that you are owed.

dul50n

NedS said:

dul50n said:

Yes I fully agree and I have been insistent, not quite every 2 days though, my time is more valuable than that

I'm more in favour of playing them at their own game and "giving them enough rope to hang themselves" to go back for compensation after resolution is reached months later

DWP will not compensate you for their failings. At best, they will pay you the amount of money that you are owed.

I wonder why they publish online the staff guide for financial redress for maladministration?

Is that just for show?

I've been down similar roads with HMRC too many times to mention and always won compensation in the end, I can't say I'm phased by the DWP

The online system is flawed, they've blatantly disregarded statutory legislation and their own decision maker guidance for nearly six months now in my case, the communication is practically non-existent and when there is communication it is non-sensical rubbish from clearly under trained staff, the list goes on.....

If that's not maladministration I can't wait for the Independent Case Examiner (when I do have a final response) to explain why not