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Severe Disablement Allowance

 

juliem
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Macmillan Welfare Rights Advisor, Barnsley MBC, Barnsley

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Help needed. Client is 75 and on SDA of £86 per week, DLA High rate both. someone claims Carers Allowance for looking after her. Husband was on State Pension of £159 per week. He died 6/1/18. He had two Private Pensions which are now offering lump sums to be commuted from the pensions. Small pension is offering £9k, large pension £16k after tax. When funeral costs etc are paid that would leave a total of £21800 savings approx.

Pension Credit Guarantee has been put into payment at £72 per week, pending those private pensions being paid to client at reduced rate. If she takes the lump sums then on SDA at £86 per week, that would mean assumed interest of £24 per week and still have entitlement to Pension Credit Guarantee and full help with rent and council tax.

Normally (on old pre 2016 April rules), if Mrs is on low pension and Mr dies, then Mrs gets an increase in her pension based on his NI Conts. My problem is that I can find no info anywhere which says whether or not this applies with SDA. As in 5 weeks the Pension Service has done nothing regarding this, it seems not, but if they suddenly say “your state pension is £159” then there would be no PC and no help with rent on £22k savings.

I have looked in CPAG, Disability Rights Handbook and the 2000-2001 edition which it refers you to re changes in SDA, and I can’t find an answer.

So in short (after War and Peace) can you inherit partners’ NIcs to increase SDA and convert it into a State Pension?

Thanks in advance.

     
Paul_Treloar_AgeUK
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Information and Advice Resources, Age UK

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Not sure if this helps Julie but your client would need to make a claim for State Pension in the first place, so if you think it’s advantageous for her to remain on SDA and PC instead, why not just do that? SDA can remain in payment indefinitely now for her.

     
juliem
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Macmillan Welfare Rights Advisor, Barnsley MBC, Barnsley

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Thanks Paul. That is good info for any future clients in the same boat. This one had already decided to take the lump sums regardless of possible effect when I got back to her, but there will be a few others about.

     
Sally63
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Generalist Adviser, Southwark Citizens Advice Bureau

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Taking the lump sums separately might also be worth considering if it is still possible

     
past caring
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Why?

     
Sally63
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So as to get under the £10,000 capital limit for pension credit and avoid tariff income when taking the £9,000 lump sum and keeping entitlement when receiving the bigger sum separately (when the £9000 is gone).

Is that wrong? I’m always open to being told I’m on the wrong track.

      [ Edited: 2 Mar 2018 at 03:21 pm by Sally63 ]
past caring
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No - it was my failure to read the whole thing that was the problem- I’d overlooked the PC element. Which means that deliberate deprivation (via a failure to apply for capital) would not be an issue.

     
Gareth Morgan
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Sally63 - 02 March 2018 03:19 PM

So as to get under the £10,000 capital limit for pension credit and avoid tariff income when taking the £9,000 lump sum and keeping entitlement when receiving the bigger sum separately (when the £9000 is gone).

Is that wrong? I’m always open to being told I’m on the wrong track.

No that’s right.  Remember though that there will be a notional income from the untaken pension fund based on the GAD tables and the current 15yr gilt rate.  Be aware also that there is no £10,000 disregard for the notional income calculation even if there is no other capital held.

     
Sally63
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past caring - 02 March 2018 04:04 PM

No - it was my failure to read the whole thing that was the problem- I’d overlooked the PC element. Which means that deliberate deprivation (via a failure to apply for capital) would not be an issue.

I started to think more about this when answering your question. The CPAG welbens pg 393 says that if you know you will receive a payment in the future then you can sell your right to receive that payment at any time so it has a market value and therefore constitutes a an actual capital resource. However it also says that the value of this is ignored if it is a right to receive an occupational or personal pension (pg 366).

I’m not sure what all that amounts to. Maybe what Gareth said.