Joint UC account, does partner keep claim if I take pension?

Noopin

Hi, we’ve had a UC claim for years as a couple.  I’ve been working self-employed and reporting my varying income and expenses, month by month.  I turned 66 in January.
Our payment includes components for Carer’s Allowance (to me), and Limited Capability to work (partner).
It’s financially advantageous for me to claim the state pension but I’m unsure what happens with my partner.  I’ll continue working, for now, content that the pension is taxable.  I understand that I’ll no longer receive the CA but what will be the position for my partner, with regard to UC?

Spoonie_Turtle

The amount of your state pension will be deducted in full from the UC.  Whether there's any UC left payable will depend on your earnings and how much the maximum UC for your claim is.

I think the carers element is still payable, the fact UC is an overlapping benefit is already accounted for by them deducting the SP amount in full.  And the other elements will still be invited in your maximum award 

Just so you know (you haven't mentioned this but in case it crosses your mind), deferring isn't an option to avoid the deduction; if you don't claim your state pension at pension age then UC will still treat you as if you are anyway and make the same deduction, so you'd be much worse off.

You can do a benefits calculation to see if there will be any UC left.
https://www.entitledto.co.uk/
https://benefits-calculator.turn2us.org.uk/

Noopin

Ah, I had an idea that claiming the pension would terminate my UC claim automatically.  There’s just the two of us, so our maximum UC payment was 725 (including the two other components).

My commitments at home meant that we often received that amount - indeed, there’s a disincentive to working beyond the minimum income floor each month and I’d frequently juggle the amount of work I did, and the spacing of the the invoices I submitted, to optimise the benefit.

Precisely @Spoonie_Turtle, I considered deferring for a year and was seduced by the UC payments, particularly as they’re not taxable.  Taking the pension and allowing that to use up most of the personal allowance seems the best way ahead.  It sounds as though we’ll still have the UC account and my pension will be treated as earned income.  

I really thought that my UC claim would end and my partner would continue with her own…but, if I read you right, I could in theory just reduce my income by £220pw and still receive full UC whilst taking the pension.

In other words - take pension and pay 20% tax on everything I earn OR take pension, reduce my hours to reach the MIF and receive UC as normal.
It feels as though I’ve missed something…

Spoonie_Turtle

Noopin said:

Ah, I had an idea that claiming the pension would terminate my UC claim automatically.  There’s just the two of us, so our maximum UC payment was 725 (including the two other components).

My commitments at home meant that we often received that amount - indeed, there’s a disincentive to working beyond the minimum income floor each month and I’d frequently juggle the amount of work I did, and the spacing of the the invoices I submitted, to optimise the benefit.

Precisely @Spoonie_Turtle, I considered deferring for a year and was seduced by the UC payments, particularly as they’re not taxable.  Taking the pension and allowing that to use up most of the personal allowance seems the best way ahead.  It sounds as though we’ll still have the UC account and my pension will be treated as earned income.  

No your pension will be treated as unearned income, with the full amount deducted from the UC.  The work allowance will not apply to it.

Definitely a good idea to do some benefit calculations with different amounts of earnings to see what your options are.

(By 'maximum UC' I meant the maximum amount with all the elements added up, before deductions for earnings or other benefit income.)

Noopin

Thanks for that, I had tried some different figures in the two options, but before I realised that we’d still have the joint claim.
My mistake, I meant unearned income.

Does this mean that I won’t need to report my earnings every month? That’s to say, they’ll know I’m receiving the pension but what are they deducting the pension full amount from?

I presume that if I happen to earn next to nothing one month, I’ll just have the pension and, maybe Carer’s Allowance, as well as my partner’s Limited Capability payment.

I’ve just read back    You said earlier - Whether there's any UC left payable will depend on your earnings and how much the maximum UC for your claim is - which suggests that even with the pension, it’s possible to get some payment from UC, depending on earnings.

Spoonie_Turtle

Noopin said:

Thanks for that, I had tried some different figures in the two options, but before I realised that we’d still have the joint claim.
My mistake, I meant unearned income.

Does this mean that I won’t need to report my earnings every month? That’s to say, they’ll know I’m receiving the pension but what are they deducting the pension full amount from?

I presume that if I happen to earn next to nothing one month, I’ll just have the pension and, maybe Carer’s Allowance, as well as my partner’s Limited Capability payment.

I’ve just read back    You said earlier - Whether there's any UC left payable will depend on your earnings and how much the maximum UC for your claim is - which suggests that even with the pension, it’s possible to get some payment from UC, depending on earnings.

Your maximum UC before deductions will be:
Couple allowance
Carer element
LCWRA element
Rent?

Add those all together, and the total is what they're deducting from.  You should be able to see this on your UC statements, as the first part before deductions.

If you're still not sure, post a screenshot of your UC statement (with any names / NINO / personal info redacted) and we can help.

If you are still working (self-employed) once you claim state pension, you will still have to report your income and expenses for the work as you already do.  Any deduction for earnings will be on top of the deduction for your pension.

poppy12345

Noopin said:

 I turned 66 in January.

To be clear, I'm assuming you're already receiving  your state pension? we are now in the middle of April. If you are then it should already be deducted in full from your UC entitlement. 

If you haven't then why not? 

Noopin

No, I’ve not yet claimed.
To be quite frank, I was gaming the UC a little because I controlled the value of invoices I submitted for payment in each month.  Thus, we have been receiving our full amount of 725 (which I came to take for granted), and I began with the simple concept of comparing 725pm (untaxed) + income (say, 30k) against 960pm (pension, taxable) + income.  Whichever left me with more, and it was pension + earning.

What I hadn’t realised was that we’d still have a joint UC account, and my income would continue to be reported.  But I can’t grasp what is affected by that or whether we’d still receive benefit that’s linked to my earning.  I can’t stop thinking of minimum income floors etc.  Is it simply whether income exceeds our maximum UC amount (725) because the pension alone does that.

poppy12345

Noopin said:

No, I’ve not yet claimed.
To be quite frank, I was gaming the UC a little because I controlled the value of invoices I submitted for payment in each month.  Thus, we have been receiving our full amount of 725 (which I came to take for granted), and I began with the simple concept of comparing 725pm (untaxed) + income (say, 30k) against 960pm (pension, taxable) + income.  Whichever left me with more, and it was pension + earning.

What I hadn’t realised was that we’d still have a joint UC account, and my income would continue to be reported.  But I can’t grasp what is affected by that or whether we’d still receive benefit that’s linked to my earning.  I can’t stop thinking of minimum income floors etc.  Is it simply whether income exceeds our maximum UC amount (725) because the pension alone does that.

That's exactly what I feared when I read the thread and your comments. This means you will now have an overpayment of UC which will need to be repaid back because you should have claimed your state pension. 

State pension is treated as unearned income, which was advised by Spoonie. It is not treated as earnings. This means that it's deducted in full from any UC entitlement. 

As UC is a means tested benefit then you should be aware that entitlement will be based on your joint circumstances. The pension will reduce your whole UC entitlement, not just part of it. 

If your maximum UC entitlement is £725/month then you are correct then your state pension (you said it's £960/month) would reduce your UC entitlement to zero.

First thing you should do is to claim your state pension and report that you have now reached state pension to UC. 

Noopin

That’s to the point, thanks.  I’ll waste no time in claiming it.  Tomorrow was to be the day I’d report my income (happens to be next to nothing, this month).
It didn’t occur to me that they’d presume I’d taken the pension…that’ll be higher than UC from here to the grave.
Just to be clear, the LCW component will go, as well.
Then, from a benefits standpoint, we’re living on a single pension.  I don’t see how my partner is accounted for.

poppy12345

Noopin said:

Just to be clear, the LCW component will go, as well.

Yes, because as has been advised, your state pension will reduce the whole amount and not just part of it. 

Noopin said:

Then, from a benefits standpoint, we’re living on a single pension.  I don’t see how my partner is accounted for.

No, you are living as a couple. For means tested benefits as you're living together entitlement is based on your joint circumstances not as single people.