Universal Credit won't deduct SIPP contributions

michaels

Spoonie_Turtle said:

michaels said:

Spoonie_Turtle said:

First thing to establish, does your partner work?  Because if not then paying into a SIPP is irrelevant in terms of deductions for earnings.

If they do, then yes by law pension contributions should be taken into account.  But people have a lot of trouble getting UC to do it.  There's a very long thread here https://forums.moneysavingexpert.com/discussion/6001734/universal-credit-and-private-pension-contributions
And no doubt others if you do a search for 'UC pension'.

Hi  Not sure of the relevance of this? (OP sorry for hijacking your thread)

Because it's only relevant to the amount of UC someone gets if there are earnings from which to deduct the pension contributions - i.e. less deduction for earnings means more UC. 

If someone isn't earning then paying into a pension won't affect the amount of UC they're entitled to.

Thanks, just me failing to read the OP properly and not spotting that it all relates to the partner.

NewBe

Thank you for all the comments. From the looks of things, I'm not the only one struggling with DWP's definition of a pension scheme.

Just to clarify, my wife works as a care worker. Her employer does not contribute to the company pension scheme. We decided a SIPP would be better as it gives us more control of investments and retirement options. During tax credits we had no issues deducting the SIPP contributions from overall income.

I do have an occupational pension which is automatically deducted from the RTI figures sent to UC. It's contributions to the SIPP, a 'registered pension scheme', that we are having problems with.

kaMelo

 It depends really upon the company the employer has chosen as to how much choice is available to people regarding where to invest the pension, some are much better than others. 

But the main point is as an employee her employer doesn't have a choice whether to contribute or not, if they don't they are breaking the law.

Dandytf

Spoonie_Turtle said:

First thing to establish, does your partner work?  Because if not then paying into a SIPP is irrelevant in terms of deductions for earnings.

If they do, then yes by law pension contributions should be taken into account.  But people have a lot of trouble getting UC to do it.  There's a very long thread here https://forums.moneysavingexpert.com/discussion/6001734/universal-credit-and-private-pension-contributions
And no doubt others if you do a search for 'UC pension'.

I've never considered Sipp Cont's for UC.
Maybe I should add journal note.

thanks

Meknaasi

I've been in contact with UC regarding this since Jan 24, and it's still not resolved, after 9 months UC accepted that my SIPP contributions can be deducted, but they refused my wife's contribution as she is not in employment, and for the same reason they refused Junior Sipp Contributions.

I wrote to the the DWP minister who sent a letter confirming that Spousal and Dependent contributions should also be deducted from 'earnings' used to calculate UC. Now I sent the letter (excerpt below). I sent UC this letter, now it's a waiting game to see if they accept their boss' ruling.

"In calculating Universal Credit, the Department will deduct from a claimant’s ‘general earnings or benefits’ from employment any ‘relievable pension contributions made by the person as an individual. This is covered by regulation 55(5)(a) of the Universal Credit Regulations 2013.

The term ‘relievable pension contributions’ is defined by reference to section 188 of the Finance Act 2004. Section 188(2) of the Finance Act ties the concept of a ‘relievable pension contribution’ to a particular individual and says that the term means ‘contributions by or on behalf of the individual’.

the relievable pension contributions that Mr XXXXX makes to the registered SIPPs, for his own benefit but also on behalf of his family members, can be deducted for the purpose of his Universal Credit award."

- Rt Hon Sir Stephen Timms MP

Minister of State for Social Security and Disability

seatbeltnoob

huckster said:

DWP does not have a standard UC process for dealing with these separate pension contributions that people want relief for.  Presumably because the number of people claiming UC and in a position to make these separate pension contributions is quite small. Therefore any IT budget for system improvement and ongoing maintenance is prioritised to helping the majority of claimants.

The process to achieve relief for the pensions is to raise mandatory reconsideration after each UC statement is issued.  And if you are unhappy with this process and the time it takes, then raise a complaint.

they could just make them file as self employed, all the employer wages will feed through, and the claimant just add their pension as a self employed expense. that would be a workaround but then MIF would need to be overridden.

penners324

The employer has to provide a pension scheme. It's illeagal for them not to.

Which is why SIPP contributions will be disregarded 

michaels

Meknaasi said:

I've been in contact with UC regarding this since Jan 24, and it's still not resolved, after 9 months UC accepted that my SIPP contributions can be deducted, but they refused my wife's contribution as she is not in employment, and for the same reason they refused Junior Sipp Contributions.

I wrote to the the DWP minister who sent a letter confirming that Spousal and Dependent contributions should also be deducted from 'earnings' used to calculate UC. Now I sent the letter (excerpt below). I sent UC this letter, now it's a waiting game to see if they accept their boss' ruling.

"In calculating Universal Credit, the Department will deduct from a claimant’s ‘general earnings or benefits’ from employment any ‘relievable pension contributions made by the person as an individual. This is covered by regulation 55(5)(a) of the Universal Credit Regulations 2013.

The term ‘relievable pension contributions’ is defined by reference to section 188 of the Finance Act 2004. Section 188(2) of the Finance Act ties the concept of a ‘relievable pension contribution’ to a particular individual and says that the term means ‘contributions by or on behalf of the individual’.

the relievable pension contributions that Mr XXXXX makes to the registered SIPPs, for his own benefit but also on behalf of his family members, can be deducted for the purpose of his Universal Credit award."

- Rt Hon Sir Stephen Timms MP

Minister of State for Social Security and Disability

That is interesting, I had not realised that it was possible to 'net off' pension contributions for other family members against household income for UC.  However given how hard it is to get them to accept and process even personal contributions I am not at all surprised you are struggling with family member contributions!  My DW earns under 3.6k so we were only plannign on declaring the value of her earnings as sipp contribution for UC whilst we will make a contribution grossed up to 3.6k.  Perhaps we should try to go for the whole 2880 against household income instead?

kaMelo

michaels said:

Meknaasi said:

I've been in contact with UC regarding this since Jan 24, and it's still not resolved, after 9 months UC accepted that my SIPP contributions can be deducted, but they refused my wife's contribution as she is not in employment, and for the same reason they refused Junior Sipp Contributions.

I wrote to the the DWP minister who sent a letter confirming that Spousal and Dependent contributions should also be deducted from 'earnings' used to calculate UC. Now I sent the letter (excerpt below). I sent UC this letter, now it's a waiting game to see if they accept their boss' ruling.

"In calculating Universal Credit, the Department will deduct from a claimant’s ‘general earnings or benefits’ from employment any ‘relievable pension contributions made by the person as an individual. This is covered by regulation 55(5)(a) of the Universal Credit Regulations 2013.

The term ‘relievable pension contributions’ is defined by reference to section 188 of the Finance Act 2004. Section 188(2) of the Finance Act ties the concept of a ‘relievable pension contribution’ to a particular individual and says that the term means ‘contributions by or on behalf of the individual’.

the relievable pension contributions that Mr XXXXX makes to the registered SIPPs, for his own benefit but also on behalf of his family members, can be deducted for the purpose of his Universal Credit award."

- Rt Hon Sir Stephen Timms MP

Minister of State for Social Security and Disability

That is interesting, I had not realised that it was possible to 'net off' pension contributions for other family members against household income for UC.  However given how hard it is to get them to accept and process even personal contributions I am not at all surprised you are struggling with family member contributions!  My DW earns under 3.6k so we were only plannign on declaring the value of her earnings as sipp contribution for UC whilst we will make a contribution grossed up to 3.6k.  Perhaps we should try to go for the whole 2880 against household income instead?

It's not possible in the way the way @Meknaasi wants. All that happens, or should happen, is that for UC purposes the claimant's income to reduced by the amount of relievable contributions.

His earnings would reduce by the amount he put into his pension however his wife has no earnings to reduce and his children are not relevant in calculating household income.

Therefore any contribution made to his wife or children's pensions have no effect on the UC calculation as they don't reduce any household income

In your case your wife has earnings, so should be reduced by the amount of contribution but her earnings can only reduce to zero, they can't have negative earnings.

michaels

kaMelo said:

michaels said:

Meknaasi said:

I've been in contact with UC regarding this since Jan 24, and it's still not resolved, after 9 months UC accepted that my SIPP contributions can be deducted, but they refused my wife's contribution as she is not in employment, and for the same reason they refused Junior Sipp Contributions.

I wrote to the the DWP minister who sent a letter confirming that Spousal and Dependent contributions should also be deducted from 'earnings' used to calculate UC. Now I sent the letter (excerpt below). I sent UC this letter, now it's a waiting game to see if they accept their boss' ruling.

"In calculating Universal Credit, the Department will deduct from a claimant’s ‘general earnings or benefits’ from employment any ‘relievable pension contributions made by the person as an individual. This is covered by regulation 55(5)(a) of the Universal Credit Regulations 2013.

The term ‘relievable pension contributions’ is defined by reference to section 188 of the Finance Act 2004. Section 188(2) of the Finance Act ties the concept of a ‘relievable pension contribution’ to a particular individual and says that the term means ‘contributions by or on behalf of the individual’.

the relievable pension contributions that Mr XXXXX makes to the registered SIPPs, for his own benefit but also on behalf of his family members, can be deducted for the purpose of his Universal Credit award."

- Rt Hon Sir Stephen Timms MP

Minister of State for Social Security and Disability

That is interesting, I had not realised that it was possible to 'net off' pension contributions for other family members against household income for UC.  However given how hard it is to get them to accept and process even personal contributions I am not at all surprised you are struggling with family member contributions!  My DW earns under 3.6k so we were only plannign on declaring the value of her earnings as sipp contribution for UC whilst we will make a contribution grossed up to 3.6k.  Perhaps we should try to go for the whole 2880 against household income instead?

It's not possible in the way the way @Meknaasi wants. All that happens, or should happen, is that for UC purposes the claimant's income to reduced by the amount of relievable contributions.

His earnings would reduce by the amount he put into his pension however his wife has no earnings to reduce and his children are not relevant in calculating household income.

Therefore any contribution made to his wife or children's pensions have no effect on the UC calculation as they don't reduce any household income

In your case your wife has earnings, so should be reduced by the amount of contribution but her earnings can only reduce to zero, they can't have negative earnings.

That is what I thought but what @Meknaasi suggests is that because the legislation simply refers to 'relievable pension contributions' being deducted from the contributor's income for the UC assessment, that 'relievable pension contributions' made by me, even if they are into the pension of others, should still count under the legislation against my income....