query on retirement pension

H5004 Retirement pension income includes RP, SP, occupational and personal pensions and certain
other pension related income as explained at ADM H5005 et seq1
. The meaning of “retirement pension
income” has the same meaning as it does in SPC legislation but this does not mean that it is treated the
same way when calculating UC. It also includes increases in RP for a person’s partner. All retirement
pension income should be taken fully into account for UC; .... there are no comparable deductions for
Income Tax and NI in UC.

This is probably a ridiculous question but.. the last sentence on this guidance states that there are no comparable deductions for income tax and NI. We are just trying to make sense of a service users unearned income from pensions on a UC claim, and cant get it to add back.  We took a closer look at the regs and came across this. In my view, this could be read as all pensions are taken into account gross (before deductions for NI/tax) but I am questioning my interpretation as I dont think I have come across any that are gross (but maybe because pensions have been below tax threshold). Can anyone please confirm this please?

With PC, within reg.17(10) (Calculation of weekly income, we find the following:

10) Subject to regulation 17B(6) (deduction of tax and contributions for self-employed earners), in the case of any income taken into account for the purpose of calculating a person’s income, there shall be disregarded—

(a)any amount payable by way of tax;
(b)any amount deducted by way of National Insurance Contributions under the 1992 Act or under the Social Security Contributions and Benefits (Northern Ireland) Act 1992;

I’m assuming that with UC, you don’t disregard any amount payable by way of tax on unearned income including that deemed to be retirement provision, even though the definition of what is “retirement provision” is common across UC and PC.

Agreed.  I do have one area of uncertainty with pensions in UC that I’ll dig into when I have time.

Reg. 74(3) says “A person who has reached the qualifying age for state pension credit is to be treated as possessing the amount of any retirement pension income for which no application has been made and to which the person might expect to be entitled if a claim were made.” 

I’m not sure whether you could argue that a positive decision to defer is different from a failure to claim the pension.  Normally a failure to claim is automatically a deferral and continues until a claim is made.  The situation is different if you’re on benefits when the guidance says “You must tell the Pension Service if you’re on benefits and you want to defer”. If someone tells the pension service, e.g. I want to defer until my 67th birthday; is that an application?  As far as UC is concerned that might have practical benefit to someone in a MAC.  The SPC regs use ‘claim’ in place of ‘application’ which, to me, is more definite.

74(4) refers back into the SPC regs and covers areas like lump sum deferrals