STATE PENSION TAXED AND HOUSING BENEFIT

NedS

HillStreetBlues said:

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.

Yes, see regulation 40, for other income (unearned income such as a State Pension):

https://www.legislation.gov.uk/uksi/2006/213/regulation/40/made

40.—(1) For the purposes of regulation 31 (average weekly income other than earnings), the income of a claimant which does not consist of earnings to be taken into account shall, subject to paragraphs (2) to (7) be his gross income and any capital treated as income under regulation 41 (capital treated as income). 

So the HB regs are clear, it is net income for earned income (wages - Reg 36), and gross income for other (unearned) income (Reg 40).

So the OP may be better off their wife/partner paying tax on their earned income where the net amount will be used than paying tax on unearned income such as a pension where the gross amount will be used.

ROG

Private pensions - NETT is used not GROSS - so if they can use the amount after tax for those then why not for the state pension?

Isthisforreal99

ROG said:

Private pensions - NETT is used not GROSS - so if they can use the amount after tax for those then why not for the state pension?

Because the Government legislated otherwise.

NedS

ROG said:

Private pensions - NETT is used not GROSS - so if they can use the amount after tax for those then why not for the state pension?

I don't believe that is correct (can you show me where in the HB Regs it says it should be net?). That said, I've seen UC get this wrong on numerous occasions, so I'm not surprised HB may be getting it wrong too.

The Housing Benefit regs are clear - earned income (wages) is net of income tax and NI (and 50% of pension conts can be deducted) (Reg 36). If it's not earned income (Reg 36) or Self Employed income (Regs 37-39), then by default it's Other Income (Reg 40) which stipulates the gross amount is to be used. Pension income, both private/occupational and State, should be treated as gross income.

ROG

I was certain that all total nett income is used for HB purposes

NedS

ROG said:

I was certain that all total nett income is used for HB purposes

Can you show me where in the HB Regs it says that?

ROG

Where does it say that state pension is to be treated differently to all other forms of income in the regs?

NedS

ROG said:

Where does it say that state pension is to be treated differently to all other forms of income in the regs?

See my previous reply:

NedS said:

Yes, see regulation 40, for other income (unearned income such as a State Pension):

https://www.legislation.gov.uk/uksi/2006/213/regulation/40/made

40.—(1) For the purposes of regulation 31 (average weekly income other than earnings), the income of a claimant which does not consist of earnings to be taken into account shall, subject to paragraphs (2) to (7) be his gross income and any capital treated as income under regulation 41 (capital treated as income). 

So the HB regs are clear, it is net income for earned income (wages - Reg 36), and gross income for other (unearned) income (Reg 40).

ROG

I earned state pension by working and accruing NI

badmemory

Surely any benefit would be about combined income & therefore any transfer would be irrelevant.