Backdated Occupational Pension

HillStreetBlues

Catonthemoon said:

Newcad said:

My understanding of the Rightsnet discussion is as follows:

They are generally saying that under current benefits rules it depends on when you take the pension payments that are in deferral.

If you are below State Pension Age then you can defer any private/occupational pension that becomes due for commencement until you reach SPA without that deferral becoming Notional Income (income that you could be taking but aren't) and so affecting Income Related benefits.
(I'm currently doing exactly that. I could have taken income from a workplace pension at 65, but if I had it would be deducted £ for £ from my UC. So I've left it deferred, and growing, until I reach 66 and SPA).

However the nub in the Rightsnet discussion is what happens if/when you do take the pension payments at any time before before you reach SPA.
The conclusion is that they are then actual income, and so they do affect Income Related benefits.
If taken before SPA as a lump sum backpayment  to the commencement date (as in the case being discussed) then they are regarded as being paid on the date that each individual payment was due, which results in an overpayment of the IR benefit from the deferred commencement date until the lump sum was taken.

If you leave the pension payments in deferral until you reach SPA then all is good,  no private pension income is  being taken while you are claiming IR benefits so IR benefits are not affected.
Your Working Age IR benefits end at SPA so what you do with the private/commercial pension after SPA can't affect them.

Notional Income (income that you could be taking but aren't) and where it does apply for deferred pension income:
If you leave the private/occupational pension payment in deferral after SPA then it will then be classed as being 'Notional Income' for Pension Age IR Benefits, ie Pension Credit and Housing Benefit, and can reduce PC/HB whether you take the private income or not.

Are you sure that’s correct? Would that not be contrary to the provisions of s.74 of the SSA Act 1992, quoted above!

Yes it's correct.
As it's not been taken it can only be Notional Income,  rules on ESA  https://www.legislation.gov.uk/uksi/2008/794

Notional income – deprivation and income on application

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—

(a)a discretionary trust;

(b)a trust derived from a payment made in consequence of a personal injury;

(c)an employment and support allowance;

(d)a jobseeker's allowance;

(e)working tax credit;

(f)child tax credit;

(g)a personal pension scheme, occupational pension scheme or a payment made by the Board of the Pension Protection Fund where the claimant [F477has not attained the qualifying age for state pension credit];

ESA Regs exempt not taking a pension while under SP(C)A