SC and capital limit for HB/CTB

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    Seeking confirmation of what to do where customer is on SC-only and capital rises above £16,000. Is the following correct?

    This is a change that must be notified to the LA in all cases (HB Reg 75).

    [b:06bb159eed]If an AIP has been set[/b:06bb159eed] PC will be unaffected and it is the responsibility of the LA to calculate capital (Pensioner HB Reg 23) and to end the HB award from the Monday after the date of change (HB Reg 68).

    [b:06bb159eed]If an AIP has not been set[/b:06bb159eed] PC will be affected and the LA must use the Pension Service’s calculation of capital. So the LA should not end the HB award until it receives a revised ETD from the PS.

    In the latter case the effective date will either be the Monday after notification by the PS (claimant notified PS on time) or the Monday of the week from which PC was amended (claimant failed to notify PS on time) – HB Reg 68B. As there may or may not be an O/P is it a good idea to suspend payments of HB and make sure PS is aware of the change?

    One last question. Am I right in thinking that an AIP start date on the ETD does [i:06bb159eed]not[/i:06bb159eed] necessarily mean an AIP has been set? Only an AIP end date implies this?


    I don’t think you have to take any notice of the AIP. That only reflects when The Pension Service will be requiring the person to provide evidence of their income (having uprated without that evidence during the AIP period).

    As to the scenario you provide, if we have the evidence of the claimant’s capital exceeding £16k then we should end the HB/CTB award from the Monday following the date that occurs. We do not need to await an amended AIF from TPS.

    The increases in capital that take it up to £16k need reporting to TPS only and in those cases we would need to await the amended AIF.


    Fully agree with above analysis.
    This is what we have been doing when we find capital above £16,000 in PSC only cases, with or without an AIF.


    I’m confused now!

    You seem to be telling me that the existence or otherwise of an [b:c8f0e1acff]assessed income [i:c8f0e1acff]period [/i:c8f0e1acff](AIP)[/b:c8f0e1acff] is irrelevant. But HB Reg 23 (pensioner version) says the LA must use the Pension Service’s calculation of capital in all cases except one – and that is where capital rises above £16,000 while an AIP is in force. Surely this implies that if no AIP is in force we must use PS calculation of capital?

    I’m happy to be proved wrong but please refer to the Regs you are using!


    I agree with Jan – that is what the Regs say. The effect seems to be to treat the increase in capital for a non-AIP case in exactly the same way as any other adverse change of circumstance: any administrative time lag between the Pension Service learning of the change and telling the LA about it should not work to the detriment of the claimant. It’s exactly the same as any other change in the AIF that would lead to the end/reduction of HB.

    The final paragraphs of Reg 23 exist only for the following reason as I see it:

    – the DWP did not want people whose capital increases to £16k+ during an AIP to escape from the HB capital limit
    – the Pension Service couldn’t care less about that so why involve them?

    If there is no AIP, the Pension Service does care about increased capital for its own reasons, in exactly the same way that it cares about wage increases, new jobs, partner’s retirement income coming on stream or whatever else. So tell the PS in a non-AIP case and wait for news. In an AIP case, cancel HB and never mind the PS.


    Thanks Peter. This still leaves the question of how authorities can tell if an AIP has been set. This information is clear from PS letters to customers but not from the ETD notifications sent to the LA. (As far as I can see the ETDs [i:b9434882f8]all[/i:b9434882f8] give an AIP start date and it’s meaningless. My theory that an AIP end date was conclusive has also been disproved. I think the dates on the ETD just tell you the period for which those particular income figures are being used. So I’m advising people to phone up the PS where necessary to find out if an AIP is in force.)


    Sorry, sticking my oar in again, and sticking with my point in my earlier reply.

    Jan – As you say, Reg 23 (amended) does make mention of the AIP within paragraph 8, but refers people to section 6 and 9 of the SPC Act.

    [i:69884212eb]6 Duty to specify assessed income period

    (1) In any case falling within subsection (3) or (4), the Secretary of State shall, on the making of the relevant decision, specify a period as the assessed income period, unless prevented by subsection (2).

    (2) The Secretary of State is prevented from specifying a period as the assessed income period under subsection (1)-
    (a) if the relevant decision takes effect at a time when an assessed income period is in force in the case of the claimant by virtue of a previous application of this section; or
    (b) in such other circumstances as may be prescribed.

    (3) The first case is where-
    (a) the Secretary of State determines the amount of a claimant’s income for the purposes of a decision relating to state pension credit;
    (b) the decision is a decision under section 8(1), 9 or 10 of the Social Security Act 1998 (c. 14) (decisions on claims etc, and decisions revising or superseding decisions);
    (c) the decision takes effect on or after-
    (i) the day on which the claimant attains the age of 65; or
    (ii) if earlier, in a case where the claimant is a member of a married or unmarried couple, the day on which the other member of the couple attains that age; and
    (d) the decision is not to the effect that the claimant is not entitled to state pension credit.

    (4) The second case is where-
    (a) the amount of the claimant’s income is determined on, or for the purposes of, an appeal against a decision that the claimant is not entitled to state pension credit;
    (b) on the appeal, it is decided that the claimant is entitled to state pension credit; and
    (c) the decision takes effect as mentioned in subsection (3)(c).

    (5) In this section “the relevant decision” means-
    (a) so far as relating to the first case, the decision mentioned in subsection (3)(a);
    (b) so far as relating to the second case, the decision on appeal mentioned in subsection (4)(b).

    (6) This section is subject to section 9.

    (7) This section and sections 7 to 10 shall be construed as one

    9 Duration of assessed income period
    (1) An assessed income period shall (subject to subsections (2) to (4)) be the period of 5 years beginning with the day on which the relevant decision takes effect.

    (2) If the Secretary of State considers that the particulars of the claimant’s retirement provision as determined for the purposes of the relevant decision are not likely, after taking account of any assumed variations under subsection (3), to be typical of the claimant’s retirement provision throughout the period of 12 months beginning with the day on which that decision takes effect-
    (a) he need not specify a period under section 6(1); and
    (b) if he does so, he may specify a period shorter than 5 years (but beginning as mentioned in subsection (1)).

    (3) It shall be assumed for the purposes of subsection (2) that the same variations fall to be made in relation to the amount of an element of the claimant’s retirement provision as determined for the purposes of the relevant decision as would fall to be made under section 7(4) if an assessed income period were to be specified in accordance with subsection (1).

    (4) An assessed income period shall, except in prescribed circumstances, end at any time at which-
    (a) the claimant becomes a member of a married or unmarried couple;
    (b) the claimant ceases to be a member of a married or unmarried couple;
    (c) the claimant attains the age of 65; or
    (d) in a case where the claimant is a member of a married or unmarried couple, the other member of the couple attains the age of 65.

    (5) Regulations may prescribe further times at which, or circumstances in which, an assessed income period shall end.[/i:69884212eb]

    My reading of those sections is that the setting of the AIP is mandatory in any case where there is an entitlement to state pension credit. Therefore any claim where SC only is being paid does have an AIP. It’s just that we may not know the dates that it starts and ends. Even though it exists, we are empowered by 23(8) to act without waiting for TPS to amend the AIF in cases where capital exceeds £16k. My thought is that writing to TPS in the cases you have identified as adding an unnecessary stage in the process.


    The assessed income period (AIP) is [i:c2d7387541]not[/i:c2d7387541] set in every case. The PC Regs you have quoted clearly state that an AIP need not be set if the claimant’s retirement income is unlikely to remain stable over the next 12 months – 9(2).

    This is reflected in the letters the PS sends out to customers. Many say an AIP has been set and give the dates (usually a 5 year period). Others say it has been decided that an AIP cannot be set and all changes must be reported.

    If the claimant tells the LA that capital has risen above £16,000 it is imperative that the LA establishes whether or not an AIP is in force. This is because the LA is [i:c2d7387541]only[/i:c2d7387541] empowered to calculate capital itself in an AIP case. Otherwise it must, by law, rely on the PS calculation of capital.

    Having compared the AIP information on customer letters with the information on the ETDs I have come to the conclusion that the latter is unreliable. That’s why I suggested [i:c2d7387541]phoning[/i:c2d7387541] the PS to check in cases where it’s not clear. Very few of our customers are reporting increases in capital above £16,000 so it’s not very time-consuming – not compared with getting embroiled in long message-board postings anyway!




    Andy –
    You have a case with an AIP on a case which I presume is Savings Credit only.
    If you are satisfied that there is more than £16,000 capital you can take the decision to end the claim for HB / CTB. 8)
    As a matter of good practise you may feel that you want to tell the Pension service as well. 8)




    Sorry to jump on the bandwagon but . . .

    I have a case where we’ve just had an ETD from the PS stating: “Capital £28,000”. There appears to be no AIP.

    My question is: Were we correct to stop the HB/CTB?

    N.B. This is slightly different because the PS have calculated capital and the claimant has appealed against our stopping HB/CTB (because they maintain that their capital is about £13,000). We have no idea what evidence PS has seen or if their calculation is correct.

    Are we obliged to follow PS calculation? How would TAS treat such a case?

    Any views appreciated.


    [b:615697ed35]The general rule [/b:615697ed35](which applies in your case) is that in SC-only cases the LA [i:615697ed35]must[/i:615697ed35] use the Pension Service’s calculation of capital. If capital is above £16,000 the claimant is no longer entitled to HB/CTB.

    [b:615697ed35]The exception [/b:615697ed35]to the general rule applies if capital rises to above £16,000 while an AIP is in force. In this case, the LA must calculate capital. (This exception is needed because the PS isn’t interested in changes of circumstances during an AIP but the HB/CTB upper capital limit still applies.)

    If you look at HB Reg 23 (pensioner version) – soon to be HB Reg 27 (pensioner version) – all should become clear [paragraphs 1, 6-8].

    Your customer should appeal against the PS calculation of capital. S/he has no right of appeal against the LA’s decision to use the PS capital figure in accordance with Reg 23(1) [see schedule to D&A Regs].


    Makes perfect sense. That is the way I was thinking.

    Now all I need to do is deal with the second part of the appeal . . . . the resultant overpayment of CTB !!!

    Many thanks

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