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Pension contributions?

Gareth Morgan
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This is from the spotlight on earnings, guidance to DWP staff on answering queries.

“Is my private pension disregarded in the Universal Credit calculation? 
Private pensions are not disregarded for Universal Credit purposes if they are paid by a third party deduction. However, if they are taken at source (like the DWP pension) this is disregarded. This is also known as a pension contribution”

Could someone explain this?

ClairemHodgson
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Gareth Morgan - 04 June 2019 09:41 AM

This is from the spotlight on earnings, guidance to DWP staff on answering queries.

“Is my private pension disregarded in the Universal Credit calculation? 
Private pensions are not disregarded for Universal Credit purposes if they are paid by a third party deduction. However, if they are taken at source (like the DWP pension) this is disregarded. This is also known as a pension contribution”

Could someone explain this?

reads as though someone has muddled the contribution one makes to ones pension, compared to a pension one is receiving.

what a dreadful bit of writing….

Charles
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I presume they mean to say that only pension contributions with relief at source get deducted from the RTI figure. Net pay arrangements do not, because the RTI figure already removes the pension contribution.

See Note 1 in paragraph H3170 here.

Gareth Morgan
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Charles - 04 June 2019 11:29 AM

I presume they mean to say that ....

Well, yes… but that isn’t what they are, presumably, telling people.  This could seriously mislead people.  One for stakeholders?

NAI
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“Seriously mislead people” As if?

Daphne
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Gareth Morgan - 04 June 2019 11:41 AM
Charles - 04 June 2019 11:29 AM

I presume they mean to say that ....

Well, yes… but that isn’t what they are, presumably, telling people.  This could seriously mislead people.  One for stakeholders?

Just on the train home from stakeholders Gareth! But will email it in - where exactly did you get it from - is that their internal guidance - is there a date on it?

Gareth Morgan
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Daphne - 04 June 2019 03:43 PM

Just on the train home from stakeholders Gareth! But will email it in - where exactly did you get it from - is that their internal guidance - is there a date on it?

From an FOI

https://www.whatdotheyknow.com/request/536701/response/1283912/attach/html/2/FOI2018 12590 Spotlight on Earnings.pdf.html

Daphne
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Thanks Gareth - I’ll email them

Ianb
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What are they trying to say about how pension contributions are treated? It is clear that when pension contributions are deducted by the employer this is reflected in the reported RTI figure which is then used as net earnings for UC calculation purposes. It is my understanding that if a person makes pension contributions from their net earnings they are also entitled to have these contributions allowed as a deduction when establishing the earnings figure used for UC. Does anyone know how this is dealt with in practice and what a claimant is required to do to evidence pension contributions made directly by themselves?

Daphne
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Reply from stakeholder forum -

Following on from your query we have looked at the text and believe this is a better way of presenting and answering this question. Based on this we will consider changing guidance.


Will my private pension contribution be disregarded in the Universal Credit calculation?

Universal Credit takes account of earnings when assessing entitlement.  Income tax, national insurance payments, personal and occupational pension contributions are all deducted from pay to establish employed earnings. For most people this is provided automatically by the employer.  However, where personal pension contributions are not made via their employer, a claimant must report these separately.  These contributions can then be deducted from the earnings to be used in the calculation of Universal Credit.

Any comments let me know and I’ll feed back…

I also asked why ‘spotlight’ guidance is not in the public domain and they replied -

Spotlight products are designed to support the service and policy level guidance for a short period. There are no plans to put Spotlights into the public domain at the present time.

MareeH
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Daphne - 16 July 2019 03:40 PM

Reply from stakeholder forum -

Following on from your query we have looked at the text and believe this is a better way of presenting and answering this question. Based on this we will consider changing guidance.


Will my private pension contribution be disregarded in the Universal Credit calculation?

Universal Credit takes account of earnings when assessing entitlement.  Income tax, national insurance payments, personal and occupational pension contributions are all deducted from pay to establish employed earnings. For most people this is provided automatically by the employer.  However, where personal pension contributions are not made via their employer, a claimant must report these separately.  These contributions can then be deducted from the earnings to be used in the calculation of Universal Credit.

Any comments let me know and I’ll feed back…

 

I have an MR which has been outstanding for six weeks so far on this matter (and the fundamental question of how to report these contributions has been unanswered on the journal for several months as the case manager insists that it’s simply not possible). 

It would be really useful if they do update their guidance!

 

Ianb
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Daphne, the new wording is much clearer. However in the light of comment by MAH perhaps the guidance should also advise how contributions are to be reported (and what evidence may be required).

Daphne
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Ianb - 17 July 2019 10:12 PM

Daphne, the new wording is much clearer. However in the light of comment by MAH perhaps the guidance should also advise how contributions are to be reported (and what evidence may be required).

Good point - I’ll feed that back to them

MareeH
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Daphne - 18 July 2019 09:29 AM
Ianb - 17 July 2019 10:12 PM

Daphne, the new wording is much clearer. However in the light of comment by MAH perhaps the guidance should also advise how contributions are to be reported (and what evidence may be required).

Good point - I’ll feed that back to them

MR now outstanding for over 11 weeks and no sign of a resolution. 

Is there any news on when new guidance might be published?

 

Daphne
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Maree - have you escalated the problem - if you have and still no resolution then if you email/direct message me the details (NINO etc) I will raise it directly with them - it will help highlight the need for proper guidance!

As guidance isn’t in public domain we can only get a copy from DWP or via FOI