UC and Pension Contributions

bored_accountant

My partner and I have recently gone through managed migration to universal credit, and have come across a problem that I have not seen discussed anywhere else.

Partner is 55 works 37 hrs earns approximately 25k, gets PIP, will probably have to take early retirement within next 2 or 3 years due to chronic health condition.

I am 58 work 14 hrs pw, earn about 10k also in receipt of carers allowance.

We have 2 dependants under 18, one receives DLA.

With an eye on retirement my partner pays 15k annually into her work pension, through AVCs

I pay 6k into my work pension, again through AVCs

None of this was a problem with tax credits, however with UC, we have been told across 3 meetings that we have been depriving ourselves of capital, then depriving ourselves of income, and now we don't meet the AET(?)

My partner has been told she needs to work more hours, even though she works 37 hrs already. We did ask 'how many more hours?' and we're told 'we don't know'

I appreciate that most people on UC wouldn't be in a position to pay so much into a pension, but we are trying to be as realistic as possible regarding how much longer my partner can work for.

Now my partner has been told she is on the intensive work search program, which means a weekly trip to the Job Centre, which is difficult as she uses a wheelchair and we both need to take time off work to attend.

Any thoughts welcome. Is there a maximum that can be paid into a pension scheme under UC?

justwhat

Think you need to get this escalated to a supervisor. There is no max for pension contributions.

https://forums.moneysavingexpert.com/discussion/comment/80764027#Comment_80764027
https://forums.moneysavingexpert.com/discussion/6534213/universal-credit-wont-deduct-sipp-contributions/p1

There are many threads regarding this. Also there are many people that do what you are doing.
You don't say if your pension contributions are gross or net.

i am personally not sure what UC does if pension contributions are all gross. As this would effect the figure on P60. 

We pay gross and net pension contributions. 100% of wages go into our pensions. However i am SE and PAYE.

Point 55.5.B in the legislation. Pension contributions are relievable.
https://www.legislation.gov.uk/uksi/2013/376/part/6/made/data.xht?view=snippet&wrap=true

Also your partner is working 37 hours and its PAYE so its a fact. UC should take it as 37 hours. 

Spoonie_Turtle

Has your partner not submitted a fit note?  She should, to get the WCA process started; if found to have LCW or LCWRA she would then not be in the intensive work search regardless of her hours.  And in the meantime her work coach should only make requirements that fit with her circumstances, they have discretion if somebody's waiting for a WCA.

The criteria for LCW/RA are here, as well as other relevant issues:
https://www.advicenow.org.uk/know-hows/employment-and-support-allowance-esa-activities-and-descriptors-and-substantial-risk
(This refers to ESA but the criteria are all the same.)

kaMelo

How are the pension contributions made, salary sacrifice, net pay or relief at source?

bored_accountant

Hi, thank you all for the above comments.

Both of us work for the local authority, we pay the 6.5% contributions into the main scheme, and the rest of our contributions are made into the AVC fund that runs alongside the main LGPS scheme.

So all deductions are shown on our payslips.

I think the problem is arising because the DWP think we are only earning approx £14k between us (when our gross combined salary is about £35k. I am assuming they only get given net income figures from HMRC.

Because £14k is below their AET figure my partner has been put in the intensive work search group to even though she works 37 hrs.

I seem to be left alone because I claim carer's allowance.

Do you have to be off work sick to get a fit note? Because partner is disabled but technically can still work with reasonable adjustments is WCA the right way to go about solving the problem? Or do we need to reduce our pension contributions until our net pay is the same as the AET?

Also is the AET figure gross or net income.

Thanks for all you help 

bored_accountant

My partner tells me that we have a 'net pay arrangement ' with LGPS and Prudential who run the LGPS AVC fund 

kaMelo

bored_accountant said:

My partner tells me that we have a 'net pay arrangement ' with LGPS and Prudential who run the LGPS AVC fund 

That is why UC think you are earning less than your AET.

Deductions via net pay arrangements are reported via RTI but under a different section. As they are deducted before tax and NI, they will only report earnings as what is left after those deductions. UC are only picking up the "earnings" section and concluding you are under your AET.

bored_accountant

kaMelo said:

bored_accountant said:

My partner tells me that we have a 'net pay arrangement ' with LGPS and Prudential who run the LGPS AVC fund 

That is why UC think you are earning less than your AET.

Deductions via net pay arrangements are reported via RTI but under a different section. As they are deducted before tax and NI, they will only report earnings as what is left after those deductions. UC are only picking up the "earnings" section and concluding you are under your AET.

Yes, I think this is what is happening!

So are we stuck with intensive job search program, unless we reduce our pension contributions to the point where our net pay exceed a the AET?

xxxxxxxx

On the subject of partner and a UC health assessment. She has PIP so, she can apply for a health assessment through her UC account even though she is working.  By Reporting a Change to Health, then listing her health conditions, and saying "yes" her health affects her ability to work. She can do this today without a fit note and then "report a fit note" when she gets the 1st fit note.

A doctor can give her fit notes, and is required to give her fit notes for benefit purposes. She would need to ask the doctor for: 
a fit note saying she is unable to work  OR
a fit note saying "You may be able to work taking account of the following advice" then the doctor puts a note saying what reasonable adjustments are required at work.

It does not matter which fit note type she gets. 

Strictly speaking she does not need any fit note, but would need to provide medical evidence, but you really do not want to go there if you do not have to, just ask the doctor for continuous fit notes, and ask the doctor for the fit note to be as long as they are willing to make it for... 1 year length would not seem unreasonable given the permanency of the disability. A doctor could also issue an "unlimited" fit note. 

For claimant such as your partner, who is in work with a work restriction due to disability, where a fit not is not suitable, instead of fit notes a doctor can write a letter stating what the disability is and how this restricts the type or hours of work they can do and how long they expect the condition to last. As I said earlier, this is all that is required to request a health assessment but I am sure if you tried this without a fit note you would have people who tell you it is not possible.

Making the fit note longer means less trips to get a new fit note, because UC will want continuous fit notes, new fit notes to be reported timeously (within 3 weeks of expiry) as and when they expire, otherwise UC will close the health journey and she will lose any chance of having a monetary award of LCWRA backdated to the day when she first reported her health affecting her ability to work.  If she is eventually found to have LCW, then it will make no difference if her health journey is stopped and then restarted while waiting for the health assessment.

However, whether she passes that health assessment (to be found to have a limited capability for work) would depend on her satisfying the descriptors given to you earlier in this thread. 

When she first reports her health condition, The work coach can turn off work search for up to 14 days, after 14 days, work search search must be turned on again, then she is at the mercy of the work coach as to how much work search and work activity they are going to require her to do.... until the health assessment decision can be made.

xxxxxxxx

bored_accountant said:

however with UC, we have been told across 3 meetings that we have been depriving ourselves of capital, then depriving ourselves of income, and now we don't meet the AET(?)

I am guessing it is a work coach who told you this? Within the period of the payslip,  i.e. monthly payslip period = 1 month, earnings are not treated as capital, so this cannot be deprivation of capital.

Whether it can be deprivation of income, I am not sure. Looking at the rules for notional income, this example is not listed.  

bored_accountant

xxxxxxxx said:

On the subject of partner and a UC health assessment. She has PIP so, she can apply for a health assessment through her UC account even though she is working.  By Reporting a Change to Health, then listing her health conditions, and saying "yes" her health affects her ability to work. She can do this today without a fit note and then "report a fit note" when she gets the 1st fit note.

A doctor can give her fit notes, and is required to give her fit notes for benefit purposes. She would need to ask the doctor for: 
a fit note saying she is unable to work  OR
a fit note saying "You may be able to work taking account of the following advice" then the doctor puts a note saying what reasonable adjustments are required at work.

It does not matter which fit note type she gets. 

Strictly speaking she does not need any fit note, but would need to provide medical evidence, but you really do not want to go there if you do not have to, just ask the doctor for continuous fit notes, and ask the doctor for the fit note to be as long as they are willing to make it for... 1 year length would not seem unreasonable given the permanency of the disability. A doctor could also issue an "unlimited" fit note. 

For claimant such as your partner, who is in work with a work restriction due to disability, where a fit not is not suitable, instead of fit notes a doctor can write a letter stating what the disability is and how this restricts the type or hours of work they can do and how long they expect the condition to last. As I said earlier, this is all that is required to request a health assessment but I am sure if you tried this without a fit note you would have people who tell you it is not possible.

Making the fit note longer means less trips to get a new fit note, because UC will want continuous fit notes, new fit notes to be reported timeously (within 3 weeks of expiry) as and when they expire, otherwise UC will close the health journey and she will lose any chance of having a monetary award of LCWRA backdated to the day when she first reported her health affecting her ability to work.  If she is eventually found to have LCW, then it will make no difference if her health journey is stopped and then restarted while waiting for the health assessment.

However, whether she passes that health assessment (to be found to have a limited capability for work) would depend on her satisfying the descriptors given to you earlier in this thread. 

This is very helpful, thank you!