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Lump sum Occupational Pension and UC
How is a lump sum OP treated for UC? Can see that a regularly monthly payment is treated as unearned income but is a lump sum treated as capital?
It’s not listed in Schedule 10 of the UC Regs 2013 as far as I can see so yes I think it is capital that is taken into account.
This may help
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/778104/admh1.pdf
“H1021 A payment is capital if it is
1. not made or due to be made regularly and
2. made without reference to a period.
The payment is income if this does not apply.”
“H5174 Whilst a claimant’s pension pot is held by the pension provider then the value of the right to that sum falls to be disregarded as capital for the purposes of UC1. Pension flexibilities allow people to withdraw money from their pension pot. This is known as a drawdown. If the claimant has withdrawn money from their pension pot then a determination has to be made as to how this is to be treated for the purposes of UC.
H5175 Where a claimant chooses to
1. take ad-hoc withdrawals or
2. take the whole sum
then the amount withdrawn falls to be treated as capital. (see ADM Chapter H1).
H5176 Where a claimant chooses to withdraw amounts on a regular basis then those amounts fall to be treated as income and taken into account as such.”
[ Edited: 26 Apr 2019 at 05:36 pm by Ianb ]