PART 4PAYMENTS
Amendment of the Claims and Payments Regulations
8. In the Claims and Payments Regulations(1) after regulation 21 (direct credit transfer) there shall be inserted the following regulation—
“Delayed payment of lump sum
21A.—(1) This regulation applies where—
(a)a person (“P”) is entitled to a lump sum under—
(i)Schedule 5 to the Contributions and Benefits Act(2)(pension increase or lump sum where entitlement to retirement pension is deferred),
(ii)Schedule 5A to that Act(3)(pension increase or lump sum where entitlement to shared additional pension is deferred), or
(iii)Schedule 1 to the Social Security (Graduated Retirement Benefit) Regulations (Northern Ireland) 2005 (further provisions replacing section 35(4) of the 1966 Act: increases of graduated retirement benefit and lump sums); or
(b)the Department decides to make a payment on account of such a lump sum.
(2) Subject to paragraph (3), for the purposes of section 7 of the Finance (No. 2) Act 2005(4) (charge to income tax on lump sum), P may elect to be paid the lump sum in the tax year (“the later year of assessment”) next following the tax year which would otherwise be the applicable year of assessment by virtue of section 8 of that Act(5) (meaning of “applicable year of assessment” in section 7).
(3) P may not elect in accordance with paragraph (2) (“a tax election”) unless he elects on the same day as he chooses a lump sum in accordance with—
(a)paragraph A1 or 3C of Schedule 5 to the Contributions and Benefits Act(6);
(b)paragraph 1 of Schedule 5A to that Act; or
(c)paragraph 12 or 17 of Schedule 1 to the Social Security (Graduated Retirement Benefit) Regulations (Northern Ireland) 2005,
or within a month of that day.
(4) A tax election may be made in writing to an office specified by the Department for accepting such elections or, except where in any particular case the Department directs that the election must be made in writing, it may be made by telephone call to the telephone number specified by the Department.
(5) If P makes a tax election, payment of the lump sum, or any payment on account of the lump sum, shall be made in the first month of the later year of assessment or as soon as reasonably practicable after that month, unless P revokes the tax election before the payment is made.
(6) If P makes no tax election in accordance with paragraphs (2) and (3), or revokes a tax election, payment of the lump sum or any payment on account of the lump sum shall be made as soon as reasonably practicable after P—
(a)elected for a lump sum, or was treated as having so elected; or
(b)revoked a tax election.
(7) If P dies before the beginning of the later year of assessment—
(a)any tax election in respect of P’s lump sum shall cease to have effect; and
(b)no person appointed under regulation 30(7) to act on P’s behalf may make a tax election.
(8) In this regulation “the later year of assessment” has the meaning given by section 8(5) of the Finance (No. 2) Act 2005.”.
1992 c. 7; relevant amendments to Schedule 5 were made by paragraphs 2 to 13 of Schedule 9 to the Pensions (Northern Ireland) Order 2005 (S.I. 2005/255 (N.I. 1)) and paragraph 6 of the Schedule to S.R. 2005 No. 434
Schedule 5A was inserted by paragraph 14 of Schedule 9 to the Pensions (Northern Ireland) Order 2005
Section 8(5) provides that subsections (6) and (7) apply where social security regulations make provision enabling the making of an election for a pension lump sum to be paid in the later year of assessment
Paragraphs A1 and 3C were inserted respectively by paragraphs 3 and 8 of Schedule 9 to the Pensions (Northern Ireland) Order 2005
Regulation 30 was amended by regulation 3(6) of S.R. 1988 No. 369, regulation 7(5) of S.R. 1990 No. 398, regulation 15 of S.R. 1992 No. 7, regulation 3(7) of S.R. 1993 No. 375, regulation 2(5) of S.R. 1994 No. 345, regulation 2(15) of S.R. 1996 No. 354, regulation 2(7) of S.R. 2000 No. 365, regulation 2(7) of S.R. 2002 No. 297, S.R. 2003 No. 191 and regulation 5(6) of S.R. 2005 No. 46