Basic Payment Scheme (BPS) being treated as income for Pension Credit

HI, I have a lady in the New Forest who has had her Pension Credit stopped as the BPS (payment to farmers) is being treated as income which I wish to appeal as it doesn’t seem right. She receives the BPS as she has Commoners Rights which are tied to her Farm and she has ponies on the New Forest. The Farm no longer operates as a farm and is only used now in the production of feed for the ponies and for the winter housing of the ponies. This lady does not keep accounts and has an email from the HMRC who have told her she does not need to do accounts as there is no profit. Unfortunately there are no receipts for the cost of maintaining the ponies but I do have a report for The New Forest Commoners’ Defence Association 2007 which lays out the costs of keeping ponies on the New Forest and the BPS received only goes towards these costs. There is no financial gain on a personal level.
The lady wishes to maintain her Commoners Rights but not at the cost of losing her PC. I feel this is a test case as she says thee are others who could or will become affected if the BPS is treated as Income. I have spent ages looking for answers and hope somebody will be bale to help as I am very keen to make a success of this appeal. Many Thanks Cathy

Pension Credit only takes account of income which is specified.  I’m away from my books now so I can’t check but it seems unlikely to be listed.

I think you need to establish the basis on which the Pension Service are saying that the BPS payment is being taken into account as income.

sec.15(1) of the State Pension Credit Act 2002 sets out an exhaustive list of the types of income that can be taken into account when assessing entitlement to PC. I’m assuming that the Pension Service are saying that the BPS payment constitutes earnings under sec.15(1)(a) because otherwise, I simply can’t see a way they could take this money into account as income.

The definition of “earnings” is in sec.17(1) of the SPC Act and this refers you to the Contributions and Benefits Act 1992. Sec.2(1)(b) provides that:

“self-employed earner” means a person who is gainfully employed in Great Britain otherwise than in employed earner’s employment (whether or not he is also employed in such employment).

and sec.3(1)(a) states “earnings” includes any remuneration or profit derived from an employment”

We have someone who lives on a farm, who receives payment in connection with that farm and that apparently requires them to be an “active farmer” in some BPS documents I’ve just been reading. So for me, the key issue is whether she should be treated as a self-employed person with earnings.

As Gareth notes, if the Pension Service aren’t treating the BPS payment as earnings, then I don’t think they have a case at all.

Gareth - Thank you. I was thinking online those lines myself, that it is not one of the listed incomes but I have not seen an exhaustive list to date.

Paul - Thank you for your response. The DWP has it listed under the heading of “other Income” on the work sheet and it reads….“income that qualifies for savings credit”. It definitely has not been taken as earnings. She had a VO who took copies of everything and the O/P goes right back to 2012, taking into account all the BPS’s received (originally single farm payments). The lady is also renting out a small office space to a local business man with no deduction for costs allowed by DWP, I will query this separately.

Historically the Commoners were not included in the scheme for BPS until a report was commissioned by the New Forest Commoners’ Defence Assoc., it was something they had to fight for and so it is a little different compared to working farmers making it more complicated. It is so important environmentally for the New Forest that these old traditions are maintained.

I hope I have replied in the right way being a newbie on the forum. Thank You Cathy.

In that case, I don’t think they have a case.

There is a list of strictly defined income that can be taken into account under sec.15 of the SPCA 2002 and it doesn’t appear that BPS payments fit into any of those criteria.

Then there’s sec.15(1)(j) which allows for ”(j)income of any prescribed description.” - the prescribed definitions are in reg.15 of the State Pension Credit Regulations 2002 and I can’t see that BPS payments meet any of those criteria either.