PCSC and Life insurance

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  • #39867
    sarah19725
    Participant

    Hi,

    Can someone please advise if i am going down the correct path with the following scenario please?

    Customer recieved in excess fo £100K life insurance payment, But in reciept of PCGC so all well and dandy as PC decide this payment should be disregarded as per their regulations and PCGC remains in pay.

    Customer turns 65, this in turns end ent to PCGC and he now qualifies for PCSC. They have not included any capital in the AIF as they continue to disregard any capital which was paid from a life assurance policy.

    So my understanding is as per HBR 27, because TPS have continued to disregard the capital we would use the information supplied by TPS and continue to award Hb and CTB as the excess capital provisions do not apply as they are disregarding the capital? ( even though there are no provisions to disregard life assurance payments in HB)

    I have spoken to TPS and they maintain the capital is disregarded for Pension Credit purposes and the decision stands so am i right in thinking we ignore this capital and follow TPS?

    Thanks 🙂

    #113704
    nickkeogh
    Participant

    The capital is disregarded by the PS only because it’s in the middle of an assessed income period, not because of the nature of the capital. They will take into account once the current assessed income period comes to an end. If only SC is now in payment HB/CTB must end if the cap exceeds £16k as per HB60+27 para 8. It’s the only time when we adjust the cap figure – see below.

    This paragraph applies if—
    (a) the Secretary of State notifies the relevant authority that the claimant´s capital has been determined as being £16,000 or less;
    (b) subsequent to that determination the claimant´s capital rises to more than £16,000; and
    (c) the increase occurs whilst there is in force an assessed income period within the meaning of sections 6 and 9 of the State Pension Credit Act.

    #113705
    sarah19725
    Participant

    Hi nickkeogh,

    They have sent me a copy of their decision and the capital is disregarded because of the type of capital by definition……

    The decision states:-

    Pension Credit procedures guide 4460 states capital that you can disregard indefinately includes the surrender value of any life insurance policy………

    So i’m thinking they will never take this amount into consideration…….. hence my confusion as there are no such disregards of life insurance on our regs……. :~

    #113706
    nickkeogh
    Participant

    Blimey, that’s generous. We would still have to take into account unfortunately. You can understand why everyone thinks that what is given in one hand is taken away with the other doesn’t it?

    #113707
    sarah19725
    Participant

    Yeah i know… so if they are aware of the nature of the capital and they have throughly investigated whther they should disregard or not and have given the customer a PCSC award wich includes no capital……. do you agree we should follow their decision and use their assessment of capital?

    #113710
    nickkeogh
    Participant

    The reg states that if the claimant’s capital rises above £16k then HB/CTB must end. Her capital exceeds 16K whatever way you look at it, the only difference being that the PS disregard that element of her capital whereas we don’t. I still don’t see how HB can continue.

    #113712
    sarah19725
    Participant

    I think after reading CPAG i have found the element they have used to disregard the capital…. page 899……. It states This has no equivilant in Sch 6 but is self explanatory….. 🙂

    I’m still thinking we should pay HB beacuse the secratary of state has not informed us capital is in excess of £16k. So i dont believe the following para applies beacuse for PCSC purposes the capital will never affect the AIP or AIF….:–

    (8) This paragraph applies if—
    (a) the Secretary of State notifies the relevant authority that the claimant´s capital has been determined as being £16,000 or less;
    (b) subsequent to that determination the claimant´s capital rises to more than £16,000; and
    (c) the increase occurs whilst there is in force an assessed income period within the meaning of sections 6 and 9 of the State Pension Credit Act

    And the remainder of the regs tell us we must follow TPS assessment of income and capital ……

    The relevant authority shall for the purpose of determining the claimant´s entitlement of housing benefit use, except where paragraphs (7) and (8) apply, the calculation of the claimant´s capital made by the Secretary of State, and shall in particular apply the provisions of regulation 43 if the claimant´s capital is calculated as being in excess of £16,000.
    (7) If paragraph (8) applies, the relevant authority shall calculate the claimant´s capital in accordance with regulations 43 to 49 below.

    I’m leaning towards paying :O ……… i need some more reading time i think :8)

    #113714
    nickkeogh
    Participant

    The The way I read it is like this;

    a) Has the SoS notified you that the clmts cap has been determined by them as being £16k or less? Yes – this was the original PCGC determination – as they disregard the life insurance payout then the capital determination hasn’t changed, only the fact that turning 65 entitles them to SC instead of GC.

    b) Has the claimants capital then exceeded £16K? Yes – it doesn’t state capital amount as determined by the PS, it only refers to the claimant’s actual capital regardless of any disregarded amounts.

    c) Has this increase occurred within an AIP? – Yes.

    I can’t see any point in the reg if we were to disregard it and use the PS amount anyway?

    I haven’t got an up-to-date CPAG 🙁 so not sure what page 899 relates to I’m afraid.

    #113715
    sarah19725
    Participant

    The page in CPAG relates to Schdule 6 of Hb PC regs which i’ve just read on here too….. where it says :-

    Capital to be disregarded:

    11. The surrender value of any policy of life insurance

    To add to the confusion…….. so if this is Hb PC regs as the capital was recieved through a life assurance policy i’m assuming we would also disregard?

    What do you think? 🙂

    #113717
    nickkeogh
    Participant

    That’s only the surrender value that’s disregarded, once it’s actually been cashed in so to speak then it’s not disregarded.

    #113719
    sarah19725
    Participant

    ahhhh noooo……… :tired:

    #113752
    Anonymous
    Guest

    It’s more than possible that TPS decision maker has made the wrong decision and simply does not understand what surrender value means. I’m afraid I see appalling decisons from them in all sorts of areas (especially LT) but what can you expect – they were recruited off the street in Motherwell to administer the benefits of a pensioner living in Chichester. I never thought I would say this but JC+ are a model of good decision making by comparison. A taste of things to come folks

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