Pension Credit (notional income)

Hi
Client currently in receipt of Pension Guarantee Credit with AIP to 2015 has the option to receive a lump sum payment of £10,000 instead of continuing to receive small occupational pension which will cease if she chooses this option. Clearly she will not be affected by an increase in capital until her AIP ends, (tariff income will not take her out of Pension Guarantee Credit) however wondering how the reduction in weekly income will be viewed; is she likely to be considered as having deprived herself of income by taking the remains of the pension as a lump sum?

Thanks Tony,  Client is planning on using lump sum on much needed home improvements.  Your reply is appreciated