Occ Pen v Charitable Payment

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    Asked for my opinion on this by one of our internal auditors (mad fool!!)

    Some years ago, a lady recevies a payment from the United Reformed Church following her husband’s death. No problem, she does declare it and for years we treat it as an Occ Pen. On subsequent review forms she clarified that this was an Ex Gratia payment in lieu of a pension. The payment slips also show a deduction for tax.

    However in 2004 this was revised and treated as a voluntary payment and £20.00 was disregarded from the amount. In November 2005 that was changed to a full disregard.

    My question is this – should this be treated as though it was an Occ Pen since income tax is deducted from the payment or should it have been treated as a voluntary / charitable payment? My thought is that it is analagous to an Occ Pen and is taken fully into account but thought I would canvass the opinion of others more knowledgeable than I.


    Difficult one. Seems strange they would describe it ‘in lieu’ of a pension, when it appears for all intents and purposes, it is a pension. I guess what that means is that it is not legally enforceable by the beneficiary.

    I would probably agree that it is not voluntary. It could be viewed as similar to the case R(IS) 4/94, where because the National Coal Board received something in return for their payments in lieu of concessionary coal (that being ‘good labour relations so as to better secure the willing services of its employees’), it could not be treated as voluntary.

    [url=http://www.osscsc.gov.uk/aspx/view.aspx?id=527]R(IS) 4/94[/url]

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