Civil Service Pension & Tax

Marcon

Catonthemoon said:

In terms of ‘research’ - again, I suspect you’re right when you say “forget it”. Firstly, what I had been looking at was a post in a thread titled ‘Backdated Occupational Pension’ (see Newcad’s comment on 14/03). Assuming he/she knows what they’re doing, then it occurred to me that if I leave things as they are, take no action, wait until I’m 67, that might have the best outcome for me ( because everything changes then).

I've just looked at the post. The comments relate to a pension 'in deferral'. That doesn't apply to you - you had applied for and been granted immediate payment of your IHER pension, so deferral was not an option because the Classic Scheme regs don't permit it.

xylophone

 if I leave things as they are, take no action, wait until I’m 67, that might have the best outcome for me

But it might not. You could find yourself on a very sticky wicket.

https://forums.moneysavingexpert.com/discussion/comment/81558696/#Comment_81558696

If you do not complete the forms to bring your  IHRP due and payable from 2013 into payment until SPA, presumably you will receive 

the PCLS and arrears of pension at that point.

Tax will have been deducted from the payment and this will have been reported to HMRC. It is possible that a query will be raised about 

a pension having commenced at age 50 ( although with Classic possibly not).

The tax position has been discussed previously. If you do not seek to apply the tax position as it was in the year when the pension was 

due payable, you could be overpaying by a large amount.

 Re DWP, you will have noted (from Silver Tabby) 

 https://forums.moneysavingexpert.com/discussion/comment/81510137/#Comment_81510137

As for DWP taking an interest, that is probably still from SPA instead of an earlier scheme NRA.  Back when the NRA was 60 (for those who met the Rule of 85) it wasn't unknown for deferred members to refuse payment because their LGPS pension was less than their means tested State benefits.  But once they hit SPA that all changed and DWP would send us an avalanche of forms to complete, detailing each and every payment by month.  We were obliged by law to supply this information - but don't know what DWP actually did with it.  

And your pension

I don’t think I would lose entitlement to my annual pension, a modest £12k or so.

https://forums.moneysavingexpert.com/discussion/comment/81760864/#Comment_81760864

If your pension was £11,700 from year 1, it's going to be nearer £16K now (Public sector pensions increase by uncapped CPI).  Even if HMRC allow you to pay the tax due by year, you will still have a substantial tax bill - and the longer you leave it the worse it will get.  

Marcon

Catonthemoon said:

Btw, I have now been migrated over to UC (from ESA) - not sure if that has any bearing on the matter?

Sorry - overlooked this bit. It makes no change to the position: your entitlement to both capital and ongoing income should have been reported as a change of circumstance 12 years ago when your IHER was granted. 

Catonthemoon said:

In terms of ‘research’ - again, I suspect you’re right when you say “forget it”. Firstly, what I had been looking at was a post in a thread titled ‘Backdated Occupational Pension’ (see Newcad’s comment on 14/03). Assuming he/she knows what they’re doing, then it occurred to me that if I leave things as they are, take no action, wait until I’m 67, that might have the best outcome for me ( because everything changes then).

You will become entitled to your state pension at SPA. Your entitlement to payment of your pension and lump sum arose long ago, so that thread isn't relevant because the circumstances are wholly different.

Edit: Newcad's post of 28 June clarifies 'deferral' and confirms that it does NOT apply to you because the Classic regs do not permit 'deferral' of an IHER:







If you are still claiming means tested benefits when you reach SPA, I doubt it will just be a Decision Maker you'll be talking to: https://www.gov.uk/benefit-fraud#:~:text=What%20happens%20if%20you're,may%20be%20reduced%20or%20stopped

Not sure I'd describe that as 'the best outcome'.

Marcon

I've added an edit to the post above to clarify. You need to look at Newcad's comment of 28 March to understand why your hope that 'everything changes when you reach SPA' isn't the get out of jail free card you appear to be banking on.

You really do need to get to grips with the fact that although the background to your situation is unusual (possibly unique), you are in the same boat as everyone else who has had a change of circumstance and decided not to report it. When it comes to light, you will suffer the same penalties as anyone else if you go on claiming means tested benefits to which you are not entitled. 




I get that the temptation to cross your fingers and hope must be considerable, but you need to tackle this. One of your other recent posts refers to planning to buy 'a nifty little sports car'. You'd be able to enjoy it a lot more if you didn't have this mess hanging over you.

xylophone

'a nifty little sports car'.

The fabled Lamborghini?

https://www.bbc.co.uk/news/uk-politics-26649162

But seriously, the OP needs to get to grips with this.

Fifefamily

One aspect that hasn’t been considered yet that may help the OP’s doom and gloom, slightly, is that as they had been working for several years before claiming ESA the likelihood is that they qualified for Contribution based ESA and had that topped up with Income Related ESA therefore not all benefits paid will be means tested, I realise they have now moved over to UC. If the OP has been in the Support Group (now LCWRA on UC), then Cont based ESA will have been in payment the whole time so they may still have some entitlement to some benefit now and during the previous years. For Cont based ESA, it is only 50% of the amount of any pension over £85/week that is taken into account. If the pension is £12000/year then that is approx £231/week, less £85 = £146 x 50% =£73.00 which would be deducted from ESA. If the pension is now closer to £16000/year as mentioned above the deduction would be approx £111.35 and rate payable is £140.55/week which would give entitlement of nearly £30/week. Obviously these amounts will be different for the earlier years but the deduction rate has been 50% over £85 for the whole period. In 2013 the weekly rate of ESA, with support group, was £106.50 so there would still have been entitlement after deduction of pension amount based on the £12000/year figure.

https://www.gov.uk/guidance/new-style-employment-and-support-allowance-detailed-guide#pension-income

Can also confirm that even if all ESA had been overpaid due to these circumstances then the NI credits would still stand as the OP was assessed as unfit for work and that decision has not changed.

Hopefully you have been entitled to Cont based ESA and in the support group during the whole period, if not, sorry for giving you some false hope! If you have this may help you to decide to notify the DWP/Council sooner to allow the situation to be sorted. I cannot remember if you have mentioned it or not but due to your health conditions PIP may also be a consideration and that will not be affected by the pension, once it goes into payment. 

xylophone

One aspect that hasn’t been considered yet that may help the OP’s doom and gloom............... 

See below re OP'S situation.

https://forums.moneysavingexpert.com/discussion/comment/81611736#Comment_81611736

Catonthemoon

xylophone said:

'a nifty little sports car'.

The fabled Lamborghini?

https://www.bbc.co.uk/news/uk-politics-26649162

But seriously, the OP needs to get to grips with this.

Looks like I’ll have to settle for an old rust bucket! 😥

Fifefamily

xylophone said:

One aspect that hasn’t been considered yet that may help the OP’s doom and gloom............... 

See below re OP'S situation.

https://forums.moneysavingexpert.com/discussion/comment/81611736#Comment_81611736

Thanks for that as it confirms that they did receive income related ESA and were in the support group. They may still have been receiving Contribution based ESA which may mean they still have some entitlement.

Catonthemoon

Fifefamily said:

One aspect that hasn’t been considered yet that may help the OP’s doom and gloom, slightly, is that as they had been working for several years before claiming ESA the likelihood is that they qualified for Contribution based ESA and had that topped up with Income Related ESA therefore not all benefits paid will be means tested, I realise they have now moved over to UC. If the OP has been in the Support Group (now LCWRA on UC), then Cont based ESA will have been in payment the whole time so they may still have some entitlement to some benefit now and during the previous years. For Cont based ESA, it is only 50% of the amount of any pension over £85/week that is taken into account. If the pension is £12000/year then that is approx £231/week, less £85 = £146 x 50% =£73.00 which would be deducted from ESA. If the pension is now closer to £16000/year as mentioned above the deduction would be approx £111.35 and rate payable is £140.55/week which would give entitlement of nearly £30/week. Obviously these amounts will be different for the earlier years but the deduction rate has been 50% over £85 for the whole period. In 2013 the weekly rate of ESA, with support group, was £106.50 so there would still have been entitlement after deduction of pension amount based on the £12000/year figure.

https://www.gov.uk/guidance/new-style-employment-and-support-allowance-detailed-guide#pension-income

Can also confirm that even if all ESA had been overpaid due to these circumstances then the NI credits would still stand as the OP was assessed as unfit for work and that decision has not changed.

Hopefully you have been entitled to Cont based ESA and in the support group during the whole period, if not, sorry for giving you some false hope! If you have this may help you to decide to notify the DWP/Council sooner to allow the situation to be sorted. I cannot remember if you have mentioned it or not but due to your health conditions PIP may also be a consideration and that will not be affected by the pension, once it goes into payment. 

@Fifefamily Many thanks for this, this is really helpful - makes me think that things may not be as bad as I had feared. 

That’s regarding the ESA side of things, however, the greater concern is with HB as that’s where the big numbers lie. To put it into perspective, rent is £1100, receive £1000 in HB. ((£12000 x 12 =£144,000.00), so that on its own wipes out the whole backdated sum!! There may also be some entitlement to HB… not sure if it would be a lot though.

I have been in the support group for the entire period.

I have never claimed PiP as, thankfully, my problems are not that severe.

As for the contributions based ESA, yes I was on it at the beginning, but, as you probably know, it only lasts for 365 days; then (I think), you go onto income based ESA. 

Here’s what I’m unable to clarify… you may be. I’ve read elsewhere about claimants being unsure whether they were on income or cont based ESA. On their award letter giving a breakdown of the entitlement, it states “your income related amount is x”. Unsurprisingly, this led them to believe they were on IR but it later transpired that they were in fact on cont based! It’s the same with my paperwork- all references are to IR, none to cont based.

Any thoughts?