Small Pots Pension effect on UC

HillStreetBlues

saintscouple said:

Yes, I am not taking a regular income from the pension, just this lump sum..
And yes, it is to clear some debts and for a special purchase. However that may not be made in the same AP as receiving the funds.

Just make sure you spend your capital during the AP the pension is paid and keep your income, as the income won't become capital until the next AP.

Yamor

In these situations, I'm not usually worried about deprivation.

Even if you spend the money on something not reasonable, it is still only deprivation if the reason for the expenditure was in order to retain or increase entitlement to UC.

However, here, if that was really the reason, then you simply wouldn't have taken the pension pot in the first place. The fact that you took the pension pot in the first place is evidence that the reason for the expenditure was not to retain or increase entitlement to UC.

Of course, there can be situations where that argument won't hold. For example, if you were coming close to pension age, and the pension pot would have started being taken into account, or if you had to access the pot, all or nothing, and only really needed, say, £2k, but then deprived yourself of the rest to retain UC entitlement.

HillStreetBlues

Yamor said:

Even if you spend the money on something not reasonable, it is still only deprivation if the reason for the expenditure was in order to retain or increase entitlement to UC.

One issue is as highlighted in R(SB) 40/85 the claimant is unlikely to admit that the expenditure was made to retain or increase entitlement to a benefit.
The more unreasonable the spending the more likely it would be considered a significant operative purpose IMO.

Yamor

HillStreetBlues said:

Yamor said:

Even if you spend the money on something not reasonable, it is still only deprivation if the reason for the expenditure was in order to retain or increase entitlement to UC.

One issue is as highlighted in R(SB) 40/85 the claimant is unlikely to admit that the expenditure was made to retain or increase entitlement to a benefit.
The more unreasonable the spending the more likely it would be considered a significant operative purpose IMO.

Yes, agreed.

My point here is that there is strong evidence that that wasn't a significant operative purpose, since there was no need to draw down the pension.

HillStreetBlues

Yamor said:

HillStreetBlues said:

Yamor said:

Even if you spend the money on something not reasonable, it is still only deprivation if the reason for the expenditure was in order to retain or increase entitlement to UC.

One issue is as highlighted in R(SB) 40/85 the claimant is unlikely to admit that the expenditure was made to retain or increase entitlement to a benefit.
The more unreasonable the spending the more likely it would be considered a significant operative purpose IMO.

My point here is that there is strong evidence that that wasn't a significant operative purpose, since there was no need to draw down the pension.

Agreed,  for the OP DoC isn't a factor worth getting concerned over.