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can EEA national claim pension from EU country and also get HB in the UK?
Hi
I don’t know where to get advice on this question so I was hoping someone would be able to advice or point me in the right direction?
Someone I work with is from EEA country and they are in pension age for that country, meaning they can claim pension from that country. The person is currently claiming UC as they are not entitled to pension in the UK for another 3 years. The person is currently claiming HB.
I am not sure if this person can claim the pension from EEA country while getting HB in the UK. Because if they claim pension from EU country, I assume their UC will then stop (I assume this would be depending on the amount they claim?)
If they don’t get any benefits in the UK then, so if pension is paid from EU country, would they still be entitled to HB?
This person has permanent residence and will be getting the settled status.
Can someone please advice or point me somewhere where I could get more information?
thank you
Receipt of a pension or benefit from another EEA state is often relevant for the purposes of EEA co-ordination rules as it can mean (putting it simply) that the state which pays the money is then responsible for payment of particular sorts of benefits. So you are right to identify the potential relevance. If your client claimed PIP, say, then it is likely that it would be refused and he would be told to claim the equivalent benefit from the state paying the pension.
However, claiming either UC including housing costs or UC & HB would not raise any issue under the co-ordination rules in these circumstances so the receipt of the pension should not have any impact on their entitlement to these benefits. It will just be the normal rules concerning right to reside and habitual residence - which aren’t an issue if your client is a permanent resident.
The pension will be treated as unearned income though and therefore there will be a reduction in his benefit to account for it - so he will not be any better off as a result of the pension unless it exceeds what he is getting already.
Refusing or failing to claim the pension might well result in him being treated as though he were receiving it anyway so would not be advisable.
Hi and thank you for your advice.
Would you be able to shed some light on this?
1) Let’s say the person makes a claim for pension from EEA country. As this claim will take a long time to process would this person while waiting still be entitled to UC?
2) When this pension is in payment would this person the no longer have entitlement to UC or would they just take into account what the pension is and if it was less would they pay the difference in UC or if it was more would this person still have to remain on UC to get Housing costs?
3) if the amount of pension was large ( for example if they backdated it) would the person then have no entitlement to HB and would they have to pay this themselves?
I have never dealt with pension from EEA country and entitlement to benefits in the UK so have absolutely no idea.
Is there any guidance I can look up?
Thank you
Lets just pretend it is just an ordinary occupational pension which happens to be payable a few years before state pension age - because really it might as well be for present purposes. I think the EU component is making this seem more complicated than it is - but EU law doesn’t have any impact on this situation at all.
Your client claims the pension. Hypothetically if the DWP are aware of the claim for the pension, they might suspend benefit - but I would have thought that unlikely.
When the pension is in payment, it will be unearned income and will be deducted pound for pound from the claimant’s UC.
You are not clear on whether your client is getting UC including housing costs or UC and housing benefit (i.e. temporary or supported accommodation). The calculations would be different. But assuming they are getting UC with housing costs and lets say they are a single person with housing costs of £500 per month.
Their UC at the moment is £317.82 personal allowance plus £500 housing costs = £817.82.
If they start getting a pension of £400 per month - then UC will be reduced by £400. So they will get £400 pension and £417.82 UC = £817.82.
If their pension is £900 per month - then UC will be reduced by £900 and will be zero. So they will just get the pension.
I would imagine that if they receive a large backdated payment, the DWP would probably just treat it as capital.
I don’t think there is any guidance which you need to look up - it should be a pretty straightforward situation.
In HB only (claimant not on UC), arrears of private pension would be taken into account as income from the beginning of the period in respect of which they are paid - for example if the payment is for the last six months it will be used as income over the past six months. Most CTR schemes will do the same thing. That means the claimant will (where the conventional 20% CTR income taper is used) lose up to 85% of the back pay to overpaid HB/adjusted CTR.
It is less clear what happens to arrears in UC: the Regs appear to be completely silent. Worth noting as well that a person in temporary/specified accommodation who gets even 1p a month of UC is passported to full HB, so if UC doesn’t take the arrears back to the start of the pension there would be a knock-on advantage on the HB side as well.
Hi
Thank you for all your advice.
So the person is entitled to backdated pension from EEA country for 5 years which I think could be around £10000. The person has been claiming JSA and HB for the last 4 years and the last year UC and housing costs. Does this mean they would expect the person to pay the benefits back when this person gets their backdated pension?
Thank you
Retirement pension is an exception to the rule that benefits cannot be notional income. Receiving the backpayment may prompt DWP to investigate this and to apply 5 years worth of notional income to create an overpayment of JSA/HB and UC.
Isn’t it just plain income?
Hi
It’s really hard to advise this person because it seems it’s not clear whether the backdated payment would have to be used to repay benefit the person was getting for 5 years. The person does not know whether there is any point in applying for this pension or not. I think to just explain this person is not in retirement age yet so in the UK the person can’t claim pension for another 2 years however this person has been entitled to pension from the EEA country for 5 years now but never claimed as she didn’t know how it would affect her financially. Now she can get the pension backdated 5 years so to not lose any of the entitlement she wants to claim but I don’t know if she would lose all her benefits in those 5 years and would have to use this backdated payment to repay the benefits claimed. It’s a grey area for me.
Is there anywhere I can get clarification?
Thank you
Retirement pension is an exception to the rule that benefits cannot be notional income. Receiving the backpayment may prompt DWP to investigate this and to apply 5 years worth of notional income to create an overpayment of JSA/HB and UC.
Except for UC, that isn’t the case unless the claimant has actually reached qualifying age for Pension Credit. And as HB Anorak hints at,
Isn’t it just plain income?
for HB purposes, retirement pension is not subject to notional capital rules.
For UC, however, it can be notional income, regardless of whether the claimant has reached Pension Credit age.
[...] that isn’t the case unless the claimant has actually reached qualifying age for Pension Credit.
Is this true for a foreign state pension? Seems to only apply to personal pension schemes and occupational pension schemes.
[...] that isn’t the case unless the claimant has actually reached qualifying age for Pension Credit.
Is this true for a foreign state pension? Seems to only apply to personal pension schemes and occupational pension schemes.
I think it might be caught.
Sec.16(1)(g) of the State Pension Credit Act which defines “retirement pensions income”, (which is where reg.67 of the UC Regs 2013 adopts it’s meaning for the purposes of reg.74 which deals with notional unearned income) includes “income from an overseas arrangement”.
In turn, the definition of what an overseas arrangement means is found at sec.181 of the Pension Schemes Act 1993:
overseas arrangement” means a scheme or arrangement which–
(a) has effect, or is capable of having effect, so as to provide benefits on termination of employment or on death or retirement to or in respect of earners;
(b) is administered wholly or primarily outside Great Britain;
(c) is not an appropriate scheme; and
(d) is not an occupational pension scheme
This is also confirmed in reg.15(2) of the State Pension Credit Regs 2002 which holds that for the purposes of defining what income means under sec.15 of the SPC Act:
(2) For the purposes of section 15(1)(f) (foreign social security benefits) of the Act, income includes–
(a) all foreign social security benefits which are similar to the social security benefits prescribed under paragraph (1), and
(b) any foreign state retirement pension
To come back to the original query though, if the client claims their overseas pension and receives a lump sum payment of arrears and regular pension payments as a result, isn’t it simply the case that the arrears are treated as capital and the regular payments as income?
[...] that isn’t the case unless the claimant has actually reached qualifying age for Pension Credit.
Is this true for a foreign state pension? Seems to only apply to personal pension schemes and occupational pension schemes.
I think it might be caught.
Sec.16(1)(g) of the State Pension Credit Act which defines “retirement pensions income”, (which is where reg.67 of the UC Regs 2013 adopts it’s meaning for the purposes of reg.74 which deals with notional unearned income) includes “income from an overseas arrangement”.
In turn, the definition of what an overseas arrangement means is found at sec.181 of the Pension Schemes Act 1993:
overseas arrangement” means a scheme or arrangement which–
(a) has effect, or is capable of having effect, so as to provide benefits on termination of employment or on death or retirement to or in respect of earners;
(b) is administered wholly or primarily outside Great Britain;
(c) is not an appropriate scheme; and
(d) is not an occupational pension schemeThis is also confirmed in reg.15(2) of the State Pension Credit Regs 2002 which holds that for the purposes of defining what income means under sec.15 of the SPC Act:
(2) For the purposes of section 15(1)(f) (foreign social security benefits) of the Act, income includes–
(a) all foreign social security benefits which are similar to the social security benefits prescribed under paragraph (1), and
(b) any foreign state retirement pension
I was referring to legacy benefits, not UC.
About UC though, I think “overseas arrangement” does not include foreign state pensions - witness the need to include foreign state pensions separately in the UC Regs as amended by reg. 3(9)(b) of S.I. 2018/65.
I think the State Pension Credit Regs you quote support this as well, as they provide for including foreign state pensions as income despite “retirement pension income” already being included by Section 15(1)(c) of the SPC Act.
I don’t know much about pensions, but probably an “overseas arrangement” only includes pensions provided to “earners” upon retirement etc. State pensions can be provided prior to actual retirement, and often to people who weren’t earners. The guidance refers to “foreign state pensions” as being “in the nature of social security” rather than pensions provided to earners.
I therefore think past caring is correct regarding foreign state pensions counting as notional income for UC. Only “retirement pension income” has the qualification (in r74(3)) that it only counts for those who have reached retirement age. Foreign state pensions will be included as notional income even prior to turning pension-age.
[ Edited: 12 Apr 2019 at 07:41 am by Charles ]Foreign state pensions will be included as notional income even prior to turning pension-age.
Yes, that’s what I was meaning to say for UC awards.
Hi
It’s really hard to advise this person because it seems it’s not clear whether the backdated payment would have to be used to repay benefit the person was getting for 5 years. The person does not know whether there is any point in applying for this pension or not. I think to just explain this person is not in retirement age yet so in the UK the person can’t claim pension for another 2 years however this person has been entitled to pension from the EEA country for 5 years now but never claimed as she didn’t know how it would affect her financially. Now she can get the pension backdated 5 years so to not lose any of the entitlement she wants to claim but I don’t know if she would lose all her benefits in those 5 years and would have to use this backdated payment to repay the benefits claimed. It’s a grey area for me.
Is there anywhere I can get clarification?
Thank you
If she claims:
(1) Any ongoing payments of the pension will be taken account in full against her UC. If five years of the pension is £10,000, then we assume that we are looking at something like £170 per month - so she will still get some UC.
(2) Any backdated lump sum will probably be treated as capital. So if she receives £10k, that will probably mean that she gets her UC reduced going forward as it will be over £6k. (I am assuming that your client doesn’t have any other income or capital). This also pre-supposes that it is possible to backdate the pension claim for 5 years which may or may not be true depending on local laws.
(3) The DWP might try to argue that there is an overpayment of JSA and/or UC - either because there is a “notional income” which she didn’t claim over those five years or by trying to apply the capital sum as income for the periods for which it would have been paid if it were paid in time. Whether any JSA overpayment would be recoverable is another matter. I am somewhat doubtful that they would try this. It would be worth appealing.
It seems unlikely that this would nil her JSA entitlement completely, so I don’t think that there would be any issue with HB in this scenario.
(4) If UC entitlement were to stop for any reason, then (presumably) the pension would carry on and she would be in a better position then.
If she doesn’t claim, then the DWP could still do (1) on the basis that she is entitled to the money even though she is not receiving it (notional income) and they still could try (3) - except that she will be substantially worse off because she won’t actually be receiving the pension.
I think that’s it in terms of practical advice?
[ Edited: 12 Apr 2019 at 01:21 pm by Elliot Kent ]