Forum Home → Discussion → Work capability issues and ESA → Thread
ESA and Gross Pension Payments
I’m stuck.
CPAG p616: “If the total amount of gross pension payments you receive is more than £85 a week, your contributory ESA is reduced by half the pension payments above £85”.
Is it gross, not net, pension payments that are used in this calculation?
Gross is what CPAG is saying but in a case I have at the moment only half the net pension payments above £85 are being taken off the client, despite her telling them of the gross amount. It makes a difference of £20pw to her ESA.
Is DWP wrong, or have I misread it. I have looked in the the legislation books referred to in CPAG’s notes but they don’t state specifically gross or net?
Many thanks.
DMG para 44739 states:
44739 Except for DMG 44741, the amount of the pension payment is the gross amount
payable. Where income tax is deducted at source, the amount to be taken into
account is the amount before tax is deducted1
.
1 R(U) 8/83.
44741 Where the rules of the claimant’s pension scheme provide for compulsory
deductions, for example to buy or repay an element of their current pension, the
amount deducted should be disregarded in calculating the amount of pension. This
is because “payments” refers to the amount the claimant is actually entitled to
receive. So a payment made under a binding obligation, for example to acquire
additional pension rights, should be disregarded in calculating the amount of the
pension.
I think I’ve seen gross figure used in practice.
Possibly relevant tangent: an overpayment of legacy c-ESA is not repayable if no misrepresentation or failure to disclose. An overpayment of new-style c-ESA (i.e. if you fall under UC) is always repayable.
Thank you both.
I suspect what has happened is client got a letter showing how much she is actually being paid (net) and showed that to DWP. But there is another letter with same figures and additionally the tax paid giving a gross total, which is what I was given.
Cheers again