STATE PENSION TAXED AND HOUSING BENEFIT

ROG

My local council do not seem to have an answer to this -
My state pension is more than my tax allowance as I have done the spouse transfer thing
This means my state pension is being taxed but the council only have the GROSS amount and not the NETT amount after tax because the tax bill only comes from the HMRC after the financial tax year has ended
As housing benefit is based on income then I am losing out on my weekly housing benefit
Here comes the big question - 
Does the council have to re-assess the housing benefit for the whole of the previous tax year once they are presented with the HMRC tax bill?

NedS

I don't know specifically about housing benefit, but for other means tested benefits such as UC (which includes a housing element), all unearned income is treated as GROSS so it does not matter whether it is taxed or not as the full gross amount is what will be used in calculating entitlement.

So you are not really losing out on any housing benefit, you are just having to pay some income tax as your taxable income is now above your personal allowance. Unfortunately you will not get more housing benefit to help offset your tax bill.

ROG

The less NETT income I get the more the housing benefit but at the moment they are basing my state pension on GROSS amount

Blancmang25

ROG said:

My local council do not seem to have an answer to this -
My state pension is more than my tax allowance as I have done the spouse transfer thing
This means my state pension is being taxed but the council only have the GROSS amount and not the NETT amount after tax because the tax bill only comes from the HMRC after the financial tax year has ended
As housing benefit is based on income then I am losing out on my weekly housing benefit
Here comes the big question - 
Does the council have to re-assess the housing benefit for the whole of the previous tax year once they are presented with the HMRC tax bill?

I am thinking outside the box but bearing in mind the housing benefit regulations. 
State Pension is applied to HB claims as a gross amount which is correct.
However as the tax threshold has not changed more pensioners are possibly going to have a tax bill to pay, as you have stated at the end if the financial year.
When you claim HB you are obliged to let them know of any changes promptly.
This is my outside the box thinking:
I would inform the council as soon as you get notification from HMRC on how much tax you have paid on your state pension. Send a covering letter explaining you have been taxed on your SP from new tax year( April 2025) and you are notifying them of this change as you now know how much tax has been paid and you couldn't notify them if the change any earlier as you did not have the figure. Ask them to apply this change from from the new tax year.
I would then let them make a decision.
Ss I said this is only my thinking, some one with more knowledge may have another idea

On-the-coast

So why not cancel the “spouse transfer thing” immediately?

ROG

On-the-coast said:

So why not cancel the “spouse transfer thing” immediately?

Cannot be cancelled until the start of a new tax year - HMRC rules
Also if I could do that then we would lose out jointly on tax free income

ROG

Blancmang25 said:

ROG said:

My local council do not seem to have an answer to this -
My state pension is more than my tax allowance as I have done the spouse transfer thing
This means my state pension is being taxed but the council only have the GROSS amount and not the NETT amount after tax because the tax bill only comes from the HMRC after the financial tax year has ended
As housing benefit is based on income then I am losing out on my weekly housing benefit
Here comes the big question - 
Does the council have to re-assess the housing benefit for the whole of the previous tax year once they are presented with the HMRC tax bill?

I am thinking outside the box but bearing in mind the housing benefit regulations. 
State Pension is applied to HB claims as a gross amount which is correct.
However as the tax threshold has not changed more pensioners are possibly going to have a tax bill to pay, as you have stated at the end if the financial year.
When you claim HB you are obliged to let them know of any changes promptly.
This is my outside the box thinking:
I would inform the council as soon as you get notification from HMRC on how much tax you have paid on your state pension. Send a covering letter explaining you have been taxed on your SP from new tax year( April 2025) and you are notifying them of this change as you now know how much tax has been paid and you couldn't notify them if the change any earlier as you did not have the figure. Ask them to apply this change from from the new tax year.
I would then let them make a decision.
Ss I said this is only my thinking, some one with more knowledge may have another idea

I have sent the council a screenshot of my HMRC page which states what tax I am going to have to pay but they will not accept it as its not being taken weekly like PAYE

Blancmang25

ROG said:

Blancmang25 said:

ROG said:

My local council do not seem to have an answer to this -
My state pension is more than my tax allowance as I have done the spouse transfer thing
This means my state pension is being taxed but the council only have the GROSS amount and not the NETT amount after tax because the tax bill only comes from the HMRC after the financial tax year has ended
As housing benefit is based on income then I am losing out on my weekly housing benefit
Here comes the big question - 
Does the council have to re-assess the housing benefit for the whole of the previous tax year once they are presented with the HMRC tax bill?

I am thinking outside the box but bearing in mind the housing benefit regulations. 
State Pension is applied to HB claims as a gross amount which is correct.
However as the tax threshold has not changed more pensioners are possibly going to have a tax bill to pay, as you have stated at the end if the financial year.
When you claim HB you are obliged to let them know of any changes promptly.
This is my outside the box thinking:
I would inform the council as soon as you get notification from HMRC on how much tax you have paid on your state pension. Send a covering letter explaining you have been taxed on your SP from new tax year( April 2025) and you are notifying them of this change as you now know how much tax has been paid and you couldn't notify them if the change any earlier as you did not have the figure. Ask them to apply this change from from the new tax year.
I would then let them make a decision.
Ss I said this is only my thinking, some one with more knowledge may have another idea

I have sent the council a screenshot of my HMRC page which states what tax I am going to have to pay but they will not accept it as its not being taken weekly like PAYE

I have had a quick(very quick!) delve into the HB regs and it would appear there was a SI (Statutory Instrument) in 2015 regarding disregards of tax, contributions etc:
https://www.legislation.gov.uk/uksi/2006/213/regulation/34
The changes took place in The Pension Act and the provision was within this act(section 28).
HB is quite an indepth piece of legislation and I think you might be better putting your question on another forum who deal with legislative matters and may know the answer.
I wouldn't advise this normally as there are some very good people on here with lots of knowledge.
Here is the link to the other forum:
https://www.rightsnet.org.uk/forums

ROG

Blancmang25 said:

ROG said:

Blancmang25 said:

ROG said:

My local council do not seem to have an answer to this -
My state pension is more than my tax allowance as I have done the spouse transfer thing
This means my state pension is being taxed but the council only have the GROSS amount and not the NETT amount after tax because the tax bill only comes from the HMRC after the financial tax year has ended
As housing benefit is based on income then I am losing out on my weekly housing benefit
Here comes the big question - 
Does the council have to re-assess the housing benefit for the whole of the previous tax year once they are presented with the HMRC tax bill?

I am thinking outside the box but bearing in mind the housing benefit regulations. 
State Pension is applied to HB claims as a gross amount which is correct.
However as the tax threshold has not changed more pensioners are possibly going to have a tax bill to pay, as you have stated at the end if the financial year.
When you claim HB you are obliged to let them know of any changes promptly.
This is my outside the box thinking:
I would inform the council as soon as you get notification from HMRC on how much tax you have paid on your state pension. Send a covering letter explaining you have been taxed on your SP from new tax year( April 2025) and you are notifying them of this change as you now know how much tax has been paid and you couldn't notify them if the change any earlier as you did not have the figure. Ask them to apply this change from from the new tax year.
I would then let them make a decision.
Ss I said this is only my thinking, some one with more knowledge may have another idea

I have sent the council a screenshot of my HMRC page which states what tax I am going to have to pay but they will not accept it as its not being taken weekly like PAYE

I have had a quick(very quick!) delve into the HB regs and it would appear there was a SI (Statutory Instrument) in 2015 regarding disregards of tax, contributions etc:
https://www.legislation.gov.uk/uksi/2006/213/regulation/34
The changes took place in The Pension Act and the provision was within this act(section 28).
HB is quite an indepth piece of legislation and I think you might be better putting your question on another forum who deal with legislative matters and may know the answer.
I wouldn't advise this normally as there are some very good people on here with lots of knowledge.
Here is the link to the other forum:
https://www.rightsnet.org.uk/forums

Unfortunately it seems that site is not for individuals

HillStreetBlues

NedS said:

I don't know specifically about housing benefit, but for other means tested benefits such as UC (which includes a housing element), all unearned income is treated as GROSS so it does not matter whether it is taxed or not as the full gross amount is what will be used in calculating entitlement.

So you are not really losing out on any housing benefit, you are just having to pay some income tax as your taxable income is now above your personal allowance. Unfortunately you will not get more housing benefit to help offset your tax bill.

I believe HB is calculated differently, can be based on average income over a period of time so it remains constant much more than UC that can have peaks and troughs. This method should also take into account of deductions such as income tax, but that might be for just earned income.
If it apples to unearned income the the LA should factor in the IT when calculating HB.

Newcad

Blancmang25 said:

...you might be better putting your question on another forum who deal with legislative matters and may know the answer.

I wouldn't advise this normally as there are some very good people on here with lots of knowledge.
Here is the link to the other forum:
https://www.rightsnet.org.uk/forums

Rightsnet is a forum for professional benefits advisors.

Whilst a lot of the content on Rightsnet can be read by anybody quite a bit of the content is behind subscription walls, and you have to be an advisor working for an organisatation to be able to have a subscription there..

Only subscribed members can make posts and reply to posts on the Rightsnet discussion forum.
(The posts can get very technical and legal on there).
Others can read them, but they can't contribute.