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  • FIRST POST
    • mum of joey
    • By mum of joey 15th Sep 18, 1:28 AM
    • 53Posts
    • 20Thanks
    mum of joey
    DWP trying to get money back for capital I knew nothing of
    • #1
    • 15th Sep 18, 1:28 AM
    DWP trying to get money back for capital I knew nothing of 15th Sep 18 at 1:28 AM
    For background, I have debts of over £20,000 through taking out high-interest credit cards and loans, just to get by, and am in a debt management programme with StepChange. I have been receiving Guaranteed Pension Credit for 4 years plus housing benefit (not full).

    At the same time, a pension has recently 'come out of the woodwork', of which I had absolutely no knowledge over the past 29 years. (taken out when I opted out of SERPS, and I was unaware that it meant that a pension was taken out for me) I have had 14 addresses in those years and a letter has 'caught up with me' this year from the pension provider (thought by the PensionWise person that I saw to be a reminder, as they would not have ever heard from me in all these years and I am now 67 and need to take it by 75). It was in a surname that I haven't had since 2005. In fact, it almost got thrown out as I thought it was just junk mail.

    I informed the DWP by letter and followed it with a phone call when I heard nothing after many weeks. Apart from completely ignoring what I had put in the letter in front of her, the woman I spoke to DEMANDED to know why I hadn't taken out the pension when I was 55. She reduced me to tears and made me feel like a criminal - I DIDN'T KNOW ABOUT THE PENSION, as I told her on the phone and in the letter. I drafted a letter of complaint but was worried about sending it in case they 'took it out' on me. They have now demanded figures from the pension provider in order to work out notional capital through 'deprivation of capital'.

    If they ignore the first £10,000, which I believe they do, that would leave almost £20,000 for them to base their figures on (obviously, it has gradually progressed to that figure so 4 years ago it would have been less). But, still, from what I can work out, it will run into £thousands but I'm not sure I'm working it out correctly or not.

    During those 4 years , I wouldn't have been able to live without the GPC. I could barely manage even WITH it, and I'm not a spendthrift. Of course, now I have this extra money, my benefits should be adjusted, of course they should, but to go back 4 years?

    But, having read the relevant sections of a handbook online for DWP employees on how they make decisions -

    1) Don't they have to prove that I deliberately deprived myself of capital in order to get benefits in order to demand repayment? I most certainly did not, and wouldn't have these terrible debts if I'd known for a second that I had a pension growing in the background for all these years. (There have been times when I have become suicidal because of the debts - why would I put myself through all that if I had a quick and easy income to make my life 100 times easier?) I never received any other communication until now.

    2) At the time, 4 years ago, I needed the GPC, which was to bring my income up to a 'liveable' income, and then debts crept up and up (half of it seems to be interest) I still desperately needed the GPC at that time. I had no alternative as I was in ignorance of the pension. That didn't change until April/May this year . If I suddenly won on a premium bond (I have 6 from the 1950s), would they expect me to repay them for benefits for the past 4 years? Surely not? It's the same thing as far as I can see. And with the pension, I didn't even have a bit of paper to show for it - at least with premium bonds, I would have known about them!

    3) Do the £20,000 worth of debts not figure in their calculations? It will take me 29 years to repay these at the rate I am paying, according to StepChange. I have some tax free cash and an annuity now, though I had to repay some recent debts not included in the debt management scheme for repairs to my very old car, which I use to take my household goods to auctions to get a few pounds and to visit my disabled son who lives 70 miles away (he can't get in my house). I understand that if I used any of that to pay off my debts at a quicker rate that I could be 'done' for capital deprivation because of that! It seems that whichever way I turn, the DWP will take everything I have, which will lead me to become so broke that I will immediately have to apply for Guaranteed Pension Credit again.

    4) I planned to appeal if they did all of the above and go to a Tribunal, which I believe I can do, and want to prove all that I have been saying. But I do want to be sure of my facts first. Every day, I wish I had never discovered this pension as it has taken over my life for the worse, and has meant more counselling for depression. I just can't see an end to it all.

    Could someone who knows the facts about how they work things out help, please? I keep reading different figures that they base it on - is it £1 a WEEK for every £250 or £500 over a certain level? I thought if it was a pension, they ignored the first £10,000 but I keep reading the figure '£6,000' capital limit in other posts.

    Thank you.
Page 1
    • Tabbytabitha
    • By Tabbytabitha 15th Sep 18, 4:19 AM
    • 4,383 Posts
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    Tabbytabitha
    • #2
    • 15th Sep 18, 4:19 AM
    • #2
    • 15th Sep 18, 4:19 AM
    Is this pension small enough that you can take it as a lump sum and use it to repay your debts?
    • Craig1981
    • By Craig1981 15th Sep 18, 6:11 AM
    • 442 Posts
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    Craig1981
    • #3
    • 15th Sep 18, 6:11 AM
    • #3
    • 15th Sep 18, 6:11 AM
    hi OP

    try this clculator for pension credits. put in your CURRENT details, savings,capital income etc but leave out your existing pension credit amounts...
    https://www.gov.uk/pension-credit-calculator

    I believe it is £1 for every £500 over £10k, however this may be for Housing Benefit and CTS calculations only
    • calcotti
    • By calcotti 15th Sep 18, 7:54 AM
    • 940 Posts
    • 651 Thanks
    calcotti
    • #4
    • 15th Sep 18, 7:54 AM
    • #4
    • 15th Sep 18, 7:54 AM
    A pension fund is not capital until such time as a lump sum is taken when the lump sum becomes capital.

    You were not required to take the pension at 55 even though you may have been allowed to. The pension can only be taken into account from the date when you reached State Pension age. That will depend on your date of birth, for a woman aged 67 now your State Pension age is likely to have between 60 and 61 (it is the same date that you became eligible for Pension Credit).

    Obviously once you actually make a decision about a pension fund the actual lump sum you take and the actual income you receive are taken into account.

    Although you have a pension fund you are not expected to take this as a capital sum. Instead the DWP should assume that you have converted it into a monthly income (they have a set of tables for doing this) and they then take the assumed monthly income into account. The result may be that you were entitled to benefits but have been overpaid and will have to pay something back but this can be by weekly deduction from you ongoing benefits.

    If you do take the pension as capital and use it to pay off debt that can be treated as deprivation of capital if the debts are not immediately repayable.

    Fit Pension Credit thefirst £10,000 of capital is ignored and the deduction rate is £1 for every £500 (or part) above £10,000. The £6,000 limit and £1 per £250 is for working age benefits.

    Apart from Pension Credit do you receive Housing Benefit or Council Tax Reduction? Provided the calculations show that you were entitled to some GPC your HB and CTR will be unaffected but if the calculations show that you were not entitled to GPC you may have been overpaid HB and CTR also.

    This may include some useful information https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs91_pension_freedom_and_benefits_fcs.pdf

    If there was a ‘normal’ Pension age attached to the fund you would be expected to take benefits from that age if it was different to State Pension age.

    Also more information here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/721826/dmgch85.pdf. Scroll down to para 85453 onwards.
    Last edited by calcotti; 15-09-2018 at 9:54 AM.
    • xylophone
    • By xylophone 15th Sep 18, 10:45 AM
    • 27,315 Posts
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    xylophone
    • #5
    • 15th Sep 18, 10:45 AM
    • #5
    • 15th Sep 18, 10:45 AM
    This has all been discussed and explained in your other threads.


    https://forums.moneysavingexpert.com/showthread.php?p=74755756#post74755756

    https://forums.moneysavingexpert.com/showthread.php?p=74502795#post74502795

    https://forums.moneysavingexpert.com/showthread.php?p=74756599#post74756599

    Have you made an appointment with CAB for an initial discussion?

    You mention here

    https://forums.moneysavingexpert.com/showthread.php?p=74575479#post74575479

    having
    "decided on an annuity"
    .

    Is this from this pension?
    • mum of joey
    • By mum of joey 15th Sep 18, 11:40 AM
    • 53 Posts
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    mum of joey
    • #6
    • 15th Sep 18, 11:40 AM
    • #6
    • 15th Sep 18, 11:40 AM
    I HAVE been discussing this in other threads, but not the specific questions that I asked in this one - ie finding out a definite way of calculating exactly how much the DWP will require of me as I keep reading different figures. Where I live is a drop-in system, with an initial short meeting then a follow-up longer meeting if necessary. You can't actually make an appointment for a future date. I have been waiting to hear from the DWP in order to discuss the exact figures, but more importantly, to find out if I actually am expected to repay money, even though I knew nothing of this in the background. It is complicated by my debt problems.

    However, it has been weeks and weeks now, (though they said it might take a couple of months to work it out) so it 's probably best to just go along to the CAB. But if I want to appeal, I can only approach the DWP but as yet I do not know what I'm appealing against until I get the figures.
    • TELLIT01
    • By TELLIT01 15th Sep 18, 12:21 PM
    • 5,544 Posts
    • 6,188 Thanks
    TELLIT01
    • #7
    • 15th Sep 18, 12:21 PM
    • #7
    • 15th Sep 18, 12:21 PM
    A pension fund is not capital until such time as a lump sum is taken when the lump sum becomes capital.

    You were not required to take the pension at 55 even though you may have been allowed to. The pension can only be taken into account from the date when you reached State Pension age.
    Originally posted by calcotti

    There are differing rules for various benefits. My brother hadn't reached State Pension age but the assumed income from a pension fund was taken into account when he applied for Pension Credits. That was a few years ago so it's possible rules have changed although from my experience is rarely to the benefit of a claimant.
    • mum of joey
    • By mum of joey 15th Sep 18, 1:14 PM
    • 53 Posts
    • 20 Thanks
    mum of joey
    • #8
    • 15th Sep 18, 1:14 PM
    • #8
    • 15th Sep 18, 1:14 PM
    Thank you for your reply and information.

    I have taken the pension pot out now, taking 25% tax-free and the rest in an annuity. I have recent personal debts which need repaying (car repairs) and wanted to keep a little in hand to pay for future car repairs, my car now at an age where it fails the MOT unless some work is done on it. I also have 3 cats that I had years before I started receiving the benefits - they are getting elderly and one isn't covered by insurance for her particular disease.

    I have not been on benefits constantly - it depended on what job I had at the time. But they are referring to the past 4 years when I've been on GPC, HB and Council Tax relief.

    But what I can't find anywhere, apart from a section in the handbook issued to the DWP (online), is whether I should be repaying anything at all up until the point that this pension surfaced. After all, why would I put myself through the agony of depression with ever-increasing debts if I knew I had £30,000 knocking around in the background? No-one would. I would have had it out of there in a second and not had the horror of paying endless amounts of interest on debts.

    The section in the handbook states that they must prove that deprivation of capital was done in order to gain benefits. This is the whole crux of the matter. At the time I needed the GPC, I NEEDED it in order to live. I had no idea that there was a 'nest egg' somewhere. I have been selling my furniture and other items and the more I buy food for my cats, the less food I buy for myself and this was BEFORE the pension pot emerged. There has been no 'deprivation of capital' - there WAS NO capital that I knew of.

    Someone has suggested that I should have cashed the whole lot in and paid off my debts. Apart from the tax implication of doing that, wouldn't that seen to be 'depriving myself of capital in order to get benefits', as the creditors have, for the past year, been happy to accept the nominal amount I have been paying them each month, therefore they weren't 'due'? It's too late now, anyway. I could have increased my payments to them with the monthly annuity income, but not if all that income is now going to be taken from me to pay back 4 years worth of benefits. It will wipe it out. I fully expected the line to be drawn at the date that this pension emerged (this year), and benefits to be stopped from then.
    • NeilCr
    • By NeilCr 15th Sep 18, 1:43 PM
    • 2,396 Posts
    • 3,344 Thanks
    NeilCr
    • #9
    • 15th Sep 18, 1:43 PM
    • #9
    • 15th Sep 18, 1:43 PM
    The trouble with all this is (and I completely understand why) you are trying to guess what DWP are going to do and how you will then react. Everything you have said sounds reasonable but, easy to say and hard to do, you need to try to accept that you won't know what you are, actually, dealing with until they write to you.

    I agree with going to CAB to get yourself known and some support. In all honesty it would, probably, have been better to do that a while back. However, it may be that they will, themselves, suggest waiting until DWP contact you before acting.

    In terms of the number of threads. Again, I get it but it may be useful to get the benefits ones merged so people can see what you have said and the previous advice.
    • mum of joey
    • By mum of joey 15th Sep 18, 2:31 PM
    • 53 Posts
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    mum of joey
    Yes, NeilCr. You are absolutely right. This huge 'black cloud' hits me every time I wake up and I am actually having counselling for depression with this subject as the 'big thing' that won't go away, however much 'mindfulness' and focusing on other things that I do. It does help a bit to 'put it on a cloud' and 'watch' it float away (as my counsellor suggested) when I go over and over it before I know what I'm dealing with, but sometimes it's hard work!

    It doesn't help that my experience with the woman at the DWP has not increased my confidence in what their decision may be and how many more hurdles I will have to leap over before I am satisfied with the outcome.

    Thank you very much for your measured and understanding reply. It always helps when people are understanding. There are things that I should have done in a different way, perhaps, and I put this bit in this forum because of the specific questions about the DWP, and it was more to do with the benefits now than about the pension itself, but I think I've reached the stage where I'm all 'forum-ed out' as can now do nothing more until I hear from the DWP. I will take a trip to the 'walk-in' CAB near me, and outline the problem and take along the sections from the DWP handbook to give me a bit of hope! Even if I have to return for a longer session when I have the DWP outcome.
    • xylophone
    • By xylophone 15th Sep 18, 3:13 PM
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    xylophone
    My brother hadn't reached State Pension age but the assumed income from a pension fund was taken into account when he applied for Pension Credits.
    But had he reached "Pension Credit Age" ( the date on which a woman of his age would have been eligible for PC)?
    • xylophone
    • By xylophone 15th Sep 18, 3:19 PM
    • 27,315 Posts
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    xylophone
    May be of interest re PC

    https://www.whatdotheyknow.com/request/guarantee_pension_credit_granted
    • TELLIT01
    • By TELLIT01 15th Sep 18, 3:29 PM
    • 5,544 Posts
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    TELLIT01
    But had he reached "Pension Credit Age" ( the date on which a woman of his age would have been eligible for PC)?
    Originally posted by xylophone

    Yes - so of course that would have impacted then. The change to female retirement age has changed all that since. Sorry if I confused the situation.
    • calcotti
    • By calcotti 15th Sep 18, 10:32 PM
    • 940 Posts
    • 651 Thanks
    calcotti
    There are differing rules for various benefits. My brother hadn't reached State Pension age but the assumed income from a pension fund was taken into account when he applied for Pension Credits. That was a few years ago so it's possible rules have changed although from my experience is rarely to the benefit of a claimant.
    Originally posted by TELLIT01
    Because the OP is female State Pension age and Pension Credit age will be the same.
    • calcotti
    • By calcotti 15th Sep 18, 10:38 PM
    • 940 Posts
    • 651 Thanks
    calcotti
    Thank you for your reply and information.

    I have taken the pension pot out now, taking 25% tax-free and the rest in an annuity. I have recent personal debts which need repaying (car repairs) and wanted to keep a little in hand to pay for future car repairs, my car now at an age where it fails the MOT unless some work is done on it. I also have 3 cats that I had years before I started receiving the benefits - they are getting elderly and one isn't covered by insurance for her particular disease.

    I have not been on benefits constantly - it depended on what job I had at the time. But they are referring to the past 4 years when I've been on GPC, HB and Council Tax relief.

    But what I can't find anywhere, apart from a section in the handbook issued to the DWP (online), is whether I should be repaying anything at all up until the point that this pension surfaced. After all, why would I put myself through the agony of depression with ever-increasing debts if I knew I had £30,000 knocking around in the background? No-one would. I would have had it out of there in a second and not had the horror of paying endless amounts of interest on debts.

    The section in the handbook states that they must prove that deprivation of capital was done in order to gain benefits. This is the whole crux of the matter. At the time I needed the GPC, I NEEDED it in order to live. I had no idea that there was a 'nest egg' somewhere. I have been selling my furniture and other items and the more I buy food for my cats, the less food I buy for myself and this was BEFORE the pension pot emerged. There has been no 'deprivation of capital' - there WAS NO capital that I knew of.

    Someone has suggested that I should have cashed the whole lot in and paid off my debts. Apart from the tax implication of doing that, wouldn't that seen to be 'depriving myself of capital in order to get benefits', as the creditors have, for the past year, been happy to accept the nominal amount I have been paying them each month, therefore they weren't 'due'? It's too late now, anyway. I could have increased my payments to them with the monthly annuity income, but not if all that income is now going to be taken from me to pay back 4 years worth of benefits. It will wipe it out. I fully expected the line to be drawn at the date that this pension emerged (this year), and benefits to be stopped from then.
    Originally posted by mum of joey
    I have tried to explain in my earlier post that this is not about deprivation of capital because a pension pot is not capital. The DWP have to calculate what income to assume from your pension pot, recalculate your Pension Credit entitlement and then compare it with what you actually received. The difference will be an overpayment and you will be expected to pay it back. Overall you will probably be no worse off (other than the stress) than if you had known about the pot at the time. I don’tthink You will have grounds to challenge a decision that follows this principle although I would certainly challenge any fine, should they seek to impose one.
    • sheramber
    • By sheramber 16th Sep 18, 11:24 AM
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    sheramber
    It is not a question of deprivation of capital, it is not having income from a weekly pension payment that you could have had.This is called notional income.

    If the pension company tell DWP that you would have received a pension of , for example, £20 per week if you had drawn the pension at the time it became available to you then DWP will work out what payment you would have been due when receiving that income of £20 each week.

    They will compare what you would have been entitled to against the payment you received and the difference will be an overpayment which you will be due to pay back.

    Also, your future benefit payments will be calculated including the amount of income you receive from the pension from now on so may be reduced.

    You will have to wait for DWP to advise you of the amounts involved before you will know how you are going to be affected.
    • xylophone
    • By xylophone 16th Sep 18, 12:22 PM
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    • 16,336 Thanks
    xylophone
    It is not a question of deprivation of capital, it is not having income from a weekly pension payment that you could have had.This is called notional income.........
    Post 2

    https://forums.moneysavingexpert.com/showthread.php?p=74755756#post74755756

    You will have to wait for DWP to advise you of the amounts involved
    Indeed.
    • mum of joey
    • By mum of joey 16th Sep 18, 12:53 PM
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    mum of joey
    Apologies to Calcotti and others about this. I seemed to be working things out in a 'woolly-headed mess'. This morning, I have cottoned on to the way that this is worked out by the DWP, thanks to you, and have used the benefits calculator given. It is true that I was confused with the 'deprivation of capital' thing, as didn't realise that it didn't become capital until the pension pot is taken.

    Presuming that they are working on figures from 4 years ago and progressively coming forwards, (though I have gone for the 'worst case scenario' and put higher figures for the whole 4 years), it looks as though it might not be as bad as I first thought - possibly a repayment of not more than the £2000 mark instead of the £5,000+ mark that I had somehow worked out myself, and if they will take this in instalments, it might not seem so bad. I am still left with Pension Credit, according to the calculations.

    One more question, though: it didn't come back with a 'Savings Credit' figure. I understand that they are 'doing away' with this, but I seem to be the age where I still qualify for it (67). Would they now apply that to me as I now have the annuity running and have done for about a month?

    Many thanks for all suggestions and help on here. I might be able to sleep at nights now!
    • xylophone
    • By xylophone 16th Sep 18, 4:03 PM
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    xylophone
    See below re GPC and SC

    https://www.ageuk.org.uk/globalassets/age-uk/documents/factsheets/fs48_pension_credit_fcs.pdf
    • mum of joey
    • By mum of joey 16th Sep 18, 6:26 PM
    • 53 Posts
    • 20 Thanks
    mum of joey
    Thank you, xylophone, for the link. Even they say that Savings Credit is very complicated to work out! So I think that that will be one of the questions when I go to the CAB. It does look like an informative booklet though, generally, so I will sit and absorb what I can from that. Thanks.
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