Converting A Classic Civil Service Pension To A Different Type Of Pension

Sarahspangles

kassy64 said:

Not going to be a popular view, but is it not morally correct for the DWP to attempt recovery, especially knowing that by deferring the pension beyond NPA would benefit significantly.

But OP’s mum hasn’t yet reached SPA. Like many middle-aged people she has some pension provision that assumed retirement at a previous SPA milestone. That’s no longer available and forcing retirement below SPA could be discriminatory.

hyubh

Sarahspangles said:

kassy64 said:

Not going to be a popular view, but is it not morally correct for the DWP to attempt recovery, especially knowing that by deferring the pension beyond NPA would benefit significantly.

But OP’s mum hasn’t yet reached SPA. Like many middle-aged people she has some pension provision that assumed retirement at a previous SPA milestone. That’s no longer available and forcing retirement below SPA could be discriminatory.

Genuine question - in what sense is this 'forcing retirement'? For sure it means 'retiring' from the point of view of the PCSPS, but all 'retiring' means from the perspective of a DB scheme is starting to draw benefits from it.
If someone takes their preserved Classic pension at 60, they are free to continue working with another employer if they wish. If however you mean, drawing a DB pension at 60 means you are less eligible for means tested working age welfare benefits... well isn't that just because you now have greater means...?

xylophone

I disagree with the interpretation 

But is your interpretation the correct definitive interpretation?

Will the OP's mother's DM agree?

income which would become available to the claimant upon application being made but which has not been acquired by the claimant is to be treated as possessed by the claimant but only from the date on which it could be expected to be acquired were an application made.

The OP's mother could have made the application on her 60th birthday when the pension was due and payable.

"The date on which it could be expected to be acquired were an application made" could be interpreted as the 60th birthday?

This seems "tailor made" for the situation where a DB pension is payable before PCA?

I do hope that the OP will come back and confirm what happened.

Ripley43

@kaMelo thank you so much for your reply. Just to clarify as I'm getting a bit lost by the different interpretations, from what you said in your last paragraph is it your opinion that the arrears will be treated as a lump sum of capital and not applied retrospectively as income?

Sarahspangles

hyubh said:

Sarahspangles said:

kassy64 said:

Not going to be a popular view, but is it not morally correct for the DWP to attempt recovery, especially knowing that by deferring the pension beyond NPA would benefit significantly.

But OP’s mum hasn’t yet reached SPA. Like many middle-aged people she has some pension provision that assumed retirement at a previous SPA milestone. That’s no longer available and forcing retirement below SPA could be discriminatory.

Genuine question - in what sense is this 'forcing retirement'? For sure it means 'retiring' from the point of view of the PCSPS, but all 'retiring' means from the perspective of a DB scheme is starting to draw benefits from it.
If someone takes their preserved Classic pension at 60, they are free to continue working with another employer if they wish. If however you mean, drawing a DB pension at 60 means you are less eligible for means tested working age welfare benefits... well isn't that just because you now have greater means...?

And if the only job they are qualified and have experience for is with the CS? Why should they be treated differently from all the other examples where pension - occupational or private - has to be disregarded?

xylophone

Genuine question - in what sense is this 'forcing retirement'? For sure it means 'retiring' from the point of view of the PCSPS, but all 'retiring' means from the perspective of a DB scheme is starting to draw benefits from it.

 For my part,  when Sarah spangles  said "forcing retirement", I took it as meaning "requiring a person either to take the DB pension at the date due and payable (NRA) or if  choosing to defer beyond NRA, having it regarded as "notional income" for the purpose of calculating entitlement to means tested benefits".

Sarahspangles

kaMelo said:

I think firstly it's best to clarify things that are not in doubt. The tax free PCLS will be treated as capital and the ongoing pension payments will be treated as income. The backdated pension lump sum is what seems to be causing a problem. The relevant paragraph being 106 of the ESA regulations.
https://www.legislation.gov.uk/uksi/2008/794/part/10/chapter/6

106.—(1) A claimant is to be treated as possessing income of which the claimant has deprived himself or herself for the purpose of securing entitlement to an employment and support allowance or increasing the amount of that allowance, or for the purpose of securing entitlement to, or increasing the amount of, income support or a jobseeker's allowance.

(2) Except in the case of—

--snipped--

(g)a personal pension scheme, occupational pension scheme or a payment made by the Board of the Pension Protection Fund where the claimant [F10has not attained the qualifying age for state pension credit];

The OP has not attained state pension credit age so all unclaimed pension benefits are disregarded. The next paragraph is relevant if, like the OP wants to, draw on their pension prior to SPC age.

income which would become available to the claimant upon application being made but which has not been acquired by the claimant is to be treated as possessed by the claimant but only from the date on which it could be expected to be acquired were an application made.

I disagree with the interpretation of that paragraph that any deferred payment(s) if received prior to SPC age should be backdated to the normal pension age of the scheme, if that was the intent of the legislation then there would be no disregard in place beyond the normal pension age of such schemes. There are other reasons but I don't think they matter as it's fairly simple  The expectation of receiving a pension is created by the application, without an application there is no expectation therefore it cannot precede the application.

And that is consistent with the Alastair example given in the DMG. The point at which notional income from a pension started pre SPA should be taken into account in the calculation for benefit is the point at which the provider could reasonably commence payment. A month is used in the example.

What is odd about the Alastair example is that A has not reached SPA.

Ripley43

@Sarahspangles Thank you for your comments. When it's convenient could you please quote the reference for the DMG where the Alastair example is.

Sarahspangles

Ripley43 said:

@Sarahspangles Thank you for your comments. When it's convenient could you please quote the reference for the DMG where the Alastair example is.

This is the link https://assets.publishing.service.gov.uk/media/66a22d1afc8e12ac3edb0498/dmg-vol-09-chapter-51-income-other-than-earnings.pdf

The hyperlink on the cover sheet takes you to section 51501 or if that doesn’t work, search Alastair (not Alistair, he is a different example)

I couldn’t find another reference to individuals being assessed as if their pension was in payment below State Pension age which is a puzzle.

Ripley43

@Sarahspangles thanks for the link. I've read the Alastair example, it doesn't make sense because as you say he's not SPC age, to me he should be SPC age and the benefit example should be SPC not ESA (IR) Then, I think that it would be in keeping with what @kaMelo has said, do you agree?
Not only that however the types of income which are disregarded as notional income are clearly stated on the page preceding the Alastair example and occupational pensions where the claimant has not reached SPC age is one of them so again that makes the Alastair example look wrong.