Capital due to backdated Pension Credits

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  • #20428
    Michele
    Participant

    Customer is visited by the Pension Service and they realise the customer has not been paid the correct amount of pension credits. Their pension credit is reassessed back to 2002. Due to the reassessment the customer was underpaid £23k and was paid as a lump sum into their bank account. The customer and wife is very elderly (90 yrs and 88 yrs).

    My understanding is the capital is disregarded for 52 weeks. I admit now that pension credits not my forte!!

    The pension service has told them they don’t need to worry about the £23k because it will not effect their benefit. How can this be if we only disregard the capital for 52 weeks?

    What happens after 52 weeks? Who, what & when should they notify of the capital? Any guidance you could give me regarding this scenario would be very much apprecaited.

    Many thanks,
    Michele…

    #2963
    markp
    Participant

    It depends on what the Pensions Service does next AND what element of PC is in payment.

    If Guarantee Credit is in, and remains in, payment and the PS don’t regard it as a [i:2c4235de01]life change[/i:2c4235de01] then nothing happens as HB/CTB for pensioners is [i:2c4235de01]largely[/i:2c4235de01] governed by the PS decision.

    If, however, they only receive Savings Credit then capital for HB/CTB may come into the equation.

    Do I know what I'm doing? The jury's out on that........................

    #2964
    Michele
    Participant

    Thank you for your reply. They have been in receipt of GC. It may be pension credit has give them a very long assessed income period because of their age. I think maybe my next step is to find out how long the GC has been assessed for. If it is for a number of years because of their age and this may explain why PS told them it wouldn’t effect their benefit.

    Does this sound feasible to you Mark P?

    Cheers
    Michele…

    #2965
    Anonymous
    Guest

    I think this would sound very feasable to a lot of people, Michele 8)

    #2966
    CraTay83
    Participant

    A claimant who receives the guarantee credit (whether or not this is topped up by the savings credit) will automatically qualify for full housing benefit (and, where appropriate, council tax benefit), but this will need to be the subject of a separate claim. Recipients of the guarantee credit are not subject to the usual £16,000 capital rule for these benefits.

    The remarkable effect of the SPCA 2002 provisions is that where the claimant receives a windfall increase during the period of the award, any such increases are disregarded (SPCA 2002, s.7(5)) and accordingly do not give rise to any obligation to report such a change to the Department. According to Mr Ian McCartney M.P., then Minster for Pensions:

    “Let us be clear about this: if a pensioner wins the lottery in the second week of his or her assessed income period, the increase in capital, be it £10 or £1 million, will not be reflected in the pension credit entitlement until the end of the assessed income period – in four years and 50 weeks’ time… We can live with ignoring a few individuals’ good fortune for the sake of simplification for the overwhelming majority of pensioners” (Standing Committee A, cols. 166 and 184).

    In the event, however, that the pensioner’s income falls, a fresh assessment can be applied for ( s.8 ). In addition, the normal powers to effect a revision of an initial decision under s.9 of the SSA 1998 remain in place (SPCA 2002, s.7( 8 )).

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