Musings on changing from UC to Pension Age benefits, and a question.

Newcad

8dayweek said:

You’ll get a deduction for the State Pension (apportioned for how many days you’re actually “receiving” SP) in the final AP. 

State Pension is counted as income for UC, evidenced by MAC's and previously UC accounts that were left running after SPA because the UC computer didn't recognise when someone reached SPA. (They supposedly finally fixed that in 2024).

However they no longer apportion part-periods in UC, that's why UC now continues to the end of the AP in which you reach SPA. UC did used to stop on your SPA date and a pro-rata payment made.
It was changed by The Universal Credit (Persons who have attained state pension credit qualifying age) (Amendment) Regulations 2020: https://www.legislation.gov.uk/uksi/2020/655/regulation/5

If you get a payment of State Pension, or anything else, in that last AP then it will be deducted as income, and that can and does happen.
However UC rules, and the UC computer, can't take into account any income (earned, or unearned), that is not paid/received in a particular AP. It generally only considers income that is paid/received in the AP in which it is paid/received.
(Yes adjustmants can be made for instances such as misreporting of earnings on RTI or 2x 4-weekly paydays in one AP, however the UC account must be open and ongoing for that adjustment to happen).

If your UC claim has ended then any income received after that has no AP to be considered against and deducted from. And because the UC account is closed it's nobody's job to go back and revise the final AP.
See also this recent thread on Rightsnet: https://www.rightsnet.org.uk/Forums/1725/Database/viewthread/21071/#98172

TimeLord1 said:

Have you spoken to any Welfare Rights at @Newcad or even Age UK pension advisors? DWP will consider your deferred workplace pension as notional income from your State Pension Age (26th Feb) onwards for the remainder of that final UC assessment period (up to 13th March).

8dayweek said:

I’ve never really known anyone’s Private Pension to be taken into account in the final AP unless it was already being drawn and taken into account. 

Private / Works Pensions are self-reported via the Journal - so quite frankly I think by the time they’re sorted out the UC claim is normally done, dusted and closed. 

A notional income decision on a deferred Pension, apportioned across however many days you’re officially State Pension age in your final AP I think would come under something considered to be too much of an administrative burden to be bothered with (and also already factored in to any HB / PC paid within the AP which is ignored anyway to serve as a “run-in” of sorts). 

The Notional Income from a deferred workplace pension is one of those areas where what legislation says should happen, and what the DWP actually do in practice, is different. As 8dayweek says that's generally done for administrative purposes.

I was reporting in my previous post that my Work Coach also confirmed that unless you get a payment in that final AP then they are not interested.

As it's an admin/policy decision then you will not find it written down anywhere the public can usually see, other than in discussion like this, it's also why you cannot absolutely rely on it because the DWP could change that policy at any time.

8dayweek

State Pension absolutely affects the final AP. 

If you’ve claimed in advance, the State Pension claim is set up, calculated and ready to pay.

If your AP dates run - say - 16th to 15th and you reach SPA on 10th, they’ll be an apportioned deduction for 5 days of State Pension (10th to 15th) in your final UC award. The only time this wouldn’t happen is if your State Pension claim for some reason was not already claimed, calculated and ready to go. 

(Certainly if you apply “late” or for some reason your State Pension is not calculated before your final AP ends and the UC claim closes, there isn’t anyone re-opening and re-calculating). 

Yamor

Unearned income is NEVER calculated based on the amounts actually received in an AP, but is based on the weekly/monthly rate of entitlement.

Therefore, if not for special rules introduced in 2014, the normal "change of circumstances" rule would have applied, and if you are entitled to, say, a pension of £200/week on the last day of your AP, then they should have included £200*52/12=£866.67 as unearned income for that AP, even if entitlement only started on the last day of the AP.

This clearly was unfair, so the Regs were amended in 2014, and a special rule was introduced for the AP in which entitlement to an unearned income begins or ends. This rule states that in the AP in which the unearned income begins, a special formula is used instead - but still not dependant on when the income is actually paid.

However, where there is entitlement throughout the AP to the unearned income, but the rate of the unearned income changes, then this rule does not apply, and the AP will be calculated simply based on the weekly (or monthly) rate of entitlement as on the last day of the AP (like any other change of circumstances). So, even if the rate of entitlement to the unearned income only increased on the last day of the AP, they would include the monthly equivalent of the increased rate for the whole AP. (There are special rules to stop this happening for the uprating increases to social security benefits, where the old rate is used.)

In the example given above of an AP of 16th to 15th and reaching SPA on the 10th, and assuming state pension entitlement of £200/week:
   - there are 6 days of state pension entitlement within the AP (10th to the 15th inclusive), and
   - the monthly equivalent is £200*52/12=£866.67
Then, the unearned income formula is as follows:
6 * ((866.67 * 12) / 365) = £170.96

However, as has been explained by others, DWP practice appears to be that if the date and rate of entitlement to State Pension has not yet been calculated by the time your UC award is terminated, then they do not "reopen" the UC calculation to take it into account. As I've said, the actual receipt of the unearned income is never relevant, so it definitely doesn't depend on whether payment has been made within the AP, but on whether the entitlement details had been finalised before the UC award terminated.


Regarding notional income from a workplace or private pension, the regs are clear that income will only be taken into account from the date you could expect to start being paid the pension if you make a claim.
I don't have personal experience with making such claims, but the examples in DWP guidance all work on the basis that it would take about 6 weeks from the making of a claim until payment is made. Assuming that isn't drastically out, then notional income would never fall to be taken into account in the last AP of a UC award in which you turn pension age.

8dayweek

Sorry, @Yamor I read the bit about part-periods incorrectly and thought you meant something else!

Newcad

Again as Yamor points out there is a discrepency between what legislation says and what the DWP actually do in practice. The admin would probably cost more that the clawback so they let it pass. Plus never forget that upsetting pensioners is a bad idea for any government.

I reach SPA in around 8-months and what DWP do in practice may have changed again even in that short time.

I can only speak for my own workplace pension, now that it's in deferment I have to request a 'Commencement Quotation' at least 7 weeks before I want payments to start. They send me the quotation for my selected start date and  if I accept, I sign and send it back and the first payment is made on that quoted date. (If I change my mind I simply don't sign and it stays in deferment until I do accept/sign a commencement quotation).

Of course that's only mine - other pension schemes may have different rules on how commencements work.

Murphybear

I can’t add much, I think it’s all been covered.  

I just wanted to wish you joy in advance of being retired.  It can be one of the best things in life.  There’s so much to do and you can have a lie in whenever you feel like it.

I retired in 2014 and it seems like a lifetime ago.  I joined U3A and 2 of the new skills/hobbies I learnt were playing MahJong and croquet.  .