Pension contributions and universal credit

amy17brook

Hi,

I've been on UC for years and have recently realised that my income on there does not match my wage slip. I queried this and was advised it was due to my pension contributions being taken into account. But what they are telling me doesn't seem to match the guidance anywhere else where it says pension is disregarded and it is based on take home pay only.

Before I take this further can anyone advise if this is correct or not as I'm currently being left with nothing each month. This is the most recent message:

Thanks for your message. I understand why this looks confusing, and you are right that this does not apply only to you or to police roles specifically — it can affect anyone paying into a workplace pension.
Universal Credit does not calculate entitlement based on take‑home pay alone. UC uses earnings information sent to us by HMRC through the PAYE real‑time information (RTI) system. By law, UC should deduct Income Tax, National Insurance, and employee workplace pension contributions when calculating earnings, but only if those pension contributions are correctly reflected in the HMRC data we receive.
In some public sector roles, including police forces, pension contributions are not always reported in a way that automatically reduces the earnings figure used for UC. This can mean UC appears to be using a figure higher than your take‑home pay, even though a pension deduction is showing on your payslip. In those cases, UC is following the HMRC data provided.

NedS

As you state, your income for UC purposes should be your gross earnings minus any deductions for income tax, NI and (your) pension contributions. If you have no other deductions, this should equal your net take home pay.

If your pension deductions are not being correctly deducted (you can see the income figure UC are provided by HMRC on your monthly UC statements), then in the first instance you should raise an 'RTI dispute' on your UC journal. You will need to provide a copy of your payslip showing your gross pay and deductions.

If the HMRC data is feed is not correct, either the employer needs to report the data correctly or you will need to raise an ongoing dispute and UC will need to manually override the data feed every month.