Civil Service Pension & Tax

Silvertabby

xylophone said:

OP - is it possible that you were dismissed on the grounds of ill health, and so weren't awarded  any pension enhancements?  Instead, you would have had the choice of taking your benefits early (from 50 was a CSPS possibility back then) subject to early payment reductions, or deferring them until no/lesser reductions applied.

This doesn't seem to fit with this?

I was retired from the Civil Service on the grounds of ill health in 2013 (I was in the Classic Scheme). Due to circumstances, I didn’t claim it at the time; I am now looking at doing so. My annual pension will be 12k. MyCSP have confirmed that it will be back-dated (ie 12k x 12 years = £144000).

That answers that!  Still can't understand how CSP allowed this pension to be deferred.  OP must have jumped through a lot of hoops to have been awarded ill health retirement in the first place.

ADD.  Just googled CSP Classic Ill Health Retirement.  States that benefits are paid immediately, with no mention of a deferral option.  Possibly because the writer didn't consider that the question would ever arise?  

Can only think that CSP were remiss at the time by not chasing OP for his pension/lump sum options and bank details.

DE_612183

could it be that the OP actually left the Civil Service ( ie handed their notice in )  of their own volition because of Ill Health - rather than going through the process of Ill Health Retirement?

molerat

DE_612183 said:

could it be that the OP actually left the Civil Service ( ie handed their notice in )  of their own volition because of Ill Health - rather than going through the process of Ill Health Retirement?

But that would not entitle them to now receive a backdated pension amount.

GunJack

molerat said:

DE_612183 said:

could it be that the OP actually left the Civil Service ( ie handed their notice in )  of their own volition because of Ill Health - rather than going through the process of Ill Health Retirement?

But that would not entitle them to now receive a backdated pension amount.

Quite, that would be a normal deferred pension

Catonthemoon

@Silvertabby @DE_612183  After several assessments by the Scheme Medical Advisers, I was eventually granted IHR. This is different to being dismissed on the grounds of ‘medical inefficiency’ (usually because of lengthy absences due to health reasons).

Shortly after, I received the claim forms. There weren’t any boxes to tick ie ‘I wish to claim now’ or ‘ I wish to defer’…the forms just weren’t returned!

Several years later, I contacted MyCSP to find out the state of play with my pension. I was advised that (a) it would be back-dated & (b) I didn’t have to take it now; I could leave it unclaimed until 75 (at the latest).

Knowing there was no pressure, I decided to leave it until the time was right for me.

When I lost the job, I had applied for ESA & HB as I had no other sources of income or savings. Shortly after, my IHR application was successful. Was I required to notify the DWP & the Local Authority? I always had previously ie when savings exceeded £6k, but, in these circs, no payments have actually gone into my a/c.

When I posed the question about my tax, it was only then that the whole business of notional income, potential overpayments/recovery, was brought to my attention. 

I’ve spent a lot time trawling through HMRC/DWP manuals together with viewing the advice/comments on various threads on here. 

Conclusion: it all seems so confusing & complex; contradictory interpretations of the rules & regs etc; honestly, it would give a woodpecker a headache!!

The $64000 question is : where does all of this leave me?

DE_612183

Looking at all that I think you have been mis-informed by MyCSP and I'd be looking to raise a complain with them about the advice you have been given and the way your pension has been administered - as others have said you should have been paid out from day 1 whether you wanted to or not - this has now led to a state where when you are paid you you could find yourself substantially out of pocket through no fault of your own.

You could also try the pension ombudsman if you get no joy with MyCSP - which as they are losing the contract in about 3 months time I wouldn't' hold out much hope of any joy from them....

molerat

Catonthemoon said:

............................

The $64000 question is : where does all of this leave me?

Needing to seek the views of a Citizens Advice or Law Centre benefits specialist

Marcon

molerat said:

Catonthemoon said:

............................

The $64000 question is : where does all of this leave me?

Needing to seek the views of a Citizens Advice or Law Centre benefits specialist

I think it might need to be even more 'specialist'. OP, try sending a message to Paul Treloar (https://www.rightsnet.org.uk/Forums/viewthread/20734/#97048 - you'll need to sign up for a free account) and also Steve Webb (https://www.thisismoney.co.uk/money/pensions/article-14114353/Taking-NHS-pension-Universal-Credit.html).

I'd be tempted to simply send them the link to this thread and add a covering note that you are struggling to understand the position where someone has been granted an ill health early retirement pension from the Civil Service Classic Pension Scheme but not taken it immediately, and wonder if they could shed any light on how this impacts on (a) the state benefits you have been claiming and (b) the income tax treatment of the backdated ill health pension payment?

If they want any more information they'll ask you for it, so I wouldn't spend ages fretting over what to include in your initial approach. 

QrizB

Catonthemoon said:

The $64000 question is : where does all of this leave me?

As I see it, even I. the worst credible outcome it shouldn't leave you any worse off than you would have been if you'd claimed your pension 12 years ago.

Your accumulated pension will be paid out and allocated to the years it should have been paid. You'll pay tax at the relevant rate and DWP will reclaim whatever overpayment of benefits there have been. You'll keep the balance (and there will be one).

But as molerat says, get some proper advice on this.

sheramber

Shortly after, I received the claim forms. There weren’t any boxes to tick ie ‘I wish to claim now’ or ‘ I wish to defer’…the forms just weren’t returned!

could that be  a reason for it being  missed?


You say “after you lost the job. You signed on.

Your IHR  application was successful  after you lost your job

That is not what was implied earlier.