Client is 64 (partner is 76)

He is taking early retirement this November and will be collecting his occu pension from his employer - LA from Nov. (will get his state retirement pension from Nov 2009)

He will receive a lump sum of £31'757 and an annual pension of £4763.60, which equates to £91.61 per week from his occu pension.

His wife is retired but only receives state retirement pension of 25p per week.

They met and married when both lived in South Africa (they are both British Citizens - both born within the UK), I think they spent in total 15 years in SA...

Their rent is £61.86 per week
Their CT is £16.25 per week

I have done a benefit check which states that they will be entitled to £45.49 per week SPC, which means full rent and CT benefit..

Can anyone tell me... will the time spent living and working abroad have any affect (effect?) on the calculation.. I keep wondering if I am missing some regulation or vital information...

Could anyone please verify the calculation.. that they should be eititled to SPC + full HB/CTB... Seems odd that they would be entitled to this with so much Capital...

Hope you can help.. x

Your calculation is correct, assuming the £31757 is the only capital they have.

I've no idea on the effect of living abroad.

IMPORTANT: If for some reason the clmt is found to be not entitled to, specifically, the guaranteed element of SPC, the capital limit for HB/CTB will bite.

I also don't know what effect, if any, time spent abroad will have on entitlement(s).

There is no reciprocal social security agreement betwen the UK and South Africa so time spent there will inevitably mean that there will be gaps in thier NI contribution records. It will also explain why the wfifes retirement pension is only 25p per week.

When the husband reaches 65 it is likely that his pension will be reduced but not necessarily to 25p, it will depend on his record. He could apply to the DWP for a pension forecast.

Thanks for the replies...

He is not entitled to his state retirement pension til November 2009... Can you apply for a pension forecast this early on..?

x

From The Pensions Service Website

http://www.thepensionservice.gov.uk/state-pension/forecast/home.asp


Important information about State Pension forecasts
If you will reach State Pension age before 6 April 2010, you can usually get a State Pension forecast online, by post, or over the telephone.

If you will reach State Pension age on or after 6 April 2010, you can currently only get a State Pension forecast online, using the State Pension forecast e-service. This is because we are still updating our other computer systems to reflect the recent changes to State Pension rules. We anticipate that you’ll be able to get a forecast by post, or over the telephone by Autumn 2008.

Thanks, given that info to client to request the forecast...

Wed 09-Jul-08 12:54 PM by pipkin

Right - his state pension will be £77.38 per week according to the forecast.. Due to get SRP from November 2009..

1. What would happen if he defers his pension..? I take it that HB would assess as if he was receiving it from the date he is entitled to it..

2. for the 12 months he gets his occu pension only - he is entitled to guaranteed PC, = full HB/CTB... However, when the SRT kicks in after 12 months, he wil be entitled to savings credit but no HB/CTB..

The amount of savings credit is dependant on how much savings he has.. How is this monitored.. ?

How often should he inform the DWP of his capital amount..? Are there guidelines the DWP rely on for this..? Should he inform them if there are substantial drops in capital..?

I understand that he could be viewed as depriving himself of capital if he spends the capital on certain things..

He has mentioned to me that he would like to buy a caravan for all subsequent holidays.. How would this be viewed byt the DWP (for pension credit) & the HB dept..???

The notional income rules apply to SPC and HB/CTC if he decides to defer his state pension. I'll leave it at that since the SPC/HB/CTB interface is not something I come across very often!

His state pension will be taken account as income for SPC and HB/CTB.
For SPC capital over £6000 will be taken at a tariff of £1 for every £500 or part thereof, so with the amount he has now it would be assumed that it produces an income of £52.

Using todays figures this produces a notional income of £221.14 ie the sum of the wifes pension of 25p plus occupational pension £91.61 plus tariff income £52 plus SRP £77.38.

The applicable amount for guarantee credit for a couple is £189.35, so that will be lost, but there would be an entitlement to savings credit of £13.41

As there is no guarantee credit, savings of >£16000 will disqualify them from HB/CTB

Paying off debts is not deprivation of capital if you are over 60, neither is paying for goods or services if doing so is reasonable

If paying off debts, and/or other reasonable expenditure brings their tariff income down by £32 (ie they get rid of £16000), they would be entitled to guarantee credit, and they would also be entitled to maximim savings credit of £26.13 plus full HB/CTB

Yes, any deferred pension would be notional income for pension credit.
- In the unlikely event that client decided to defer, but was still entitled to some guarantee PC (even after £77 shortfall) then would get full passported HC/CTB as on guarantee PC.
- If client not on PC then notional income rules don't apply to calculation of HB/CTB
- If client on savings PC only then notional rules do again kick in for HB/CTB

have a look at this Age Concern factsheet on effect of deferring RP on other benefits
http://www.ageconcern.org.uk/AgeConcern/is12.asp

alban

Will his reaching pension age affect his wife's SP too?

She may become entitled to a Category B pension depending on his contribution record

Thanks for all the replies, have a lot to think about.. Stainsby, thanks for the info on deprivation of capital.. this client actually has over £60k of debts (dont ask..!) and I think the creditors would accept a full and final offer, much less than the current balances to get rid of them...

I take it, lets say he gets £31k lump sum pension and spends £10k of this on clearing debts, that when he has done this, he contacts DWP to inform then capital has decreased.. as this could potentially mean additional savings pension credit....

Would they accept £10k being spent on a caravan though..????

Would the £60,000-worth of creditors?