PART 6Assessment of income and capital
SECTION 5
Other income
Notional income41
1
A claimant shall be treated as possessing—
a
subject to paragraph (2), the amount of any retirement pension income—
i
for which no claim has been made; and
ii
to which he might expect to be entitled if a claim for it were made;
b
income from an occupational pension scheme which the claimant elected to defer.
2
Paragraph (1)(a) shall not apply to the following where entitlement has been deferred—
a
a Category A or Category B retirement pension payable under sections 43 to 55 of the Act;
b
a shared additional pension payable under section 55A of the Act F1; and
c
graduated retirement benefit payable under sections 36 or 37 of the National Insurance Act 1965 F2.
3
For the purposes of paragraph (2), entitlement has been deferred—
a
in the case of a Category A or Category B pension, in the circumstances specified in section 55(3) of the Act;
b
in the case of a shared additional pension, in the circumstances specified in section 55C(3) of the Act;
c
in the case of graduated retirement benefit, in the circumstances specified in section 36(4) and (4A) of the National Insurance Act 1965 F3.
F74
This paragraph applies where a person aged not less than 60—
a
is entitled to money purchase benefits under an occupational pension scheme or a personal pension scheme;
b
fails to purchase an annuity with the funds available in that scheme; and
c
either—
i
defers in whole or in part the payment of any income which would have been payable to him by his pension fund holder, or
ii
fails to take any necessary action to secure that the whole of any income which would be payable to him by his pension fund holder upon his applying for it, is so paid, or
iii
income withdrawal is not available to him under that scheme.
4A
Where paragraph (4) applies, the amount of any income foregone shall be treated as possessed by that person, but only from the date on which it could be expected to be acquired were an application for it to be made.
5
The amount of any income foregone in a case F8where paragraph (4)(c)(i) or (ii) applies shall be the maximum amount of income which may be withdrawn from the fund and shall be determined by the relevant authority which shall take account of information provided by the pension fund holder in accordance with regulation 67(6) (evidence and information).
6
The amount of any income foregone in a case F9where paragraph (4)(c)(iii) applies shall be the income that the claimant could have received without purchasing an annuity had the funds held under the relevant scheme F10... been held under a personal pension scheme or occupational pension scheme where income withdrawal was available and shall be determined in the manner specified in paragraph (5).
7
In paragraph (4), “money purchase benefits” has the meaning it has in the Pension Schemes Act 1993 F4.
8
F11Subject to paragraph (8A), a person shall be treated as possessing income of which he has deprived himself for the purpose of securing entitlement to housing benefit or increasing the amount of that benefit.
F128A
Paragraph (8) shall not apply in respect of the amount of an increase of pension or benefit where a person, having made an election in favour of that increase of pension or benefit under Schedule 5 or 5A to the Contributions and Benefits Act or under Schedule 1 to the Graduated Retirement Benefit Regulations, changes that election in accordance with regulations made under Schedule 5 or 5A to that Act in favour of a lump sum.
8B
In paragraph (8A), “lump sum” means a lump sum under Schedule 5 or 5A to the Contributions and Benefits Act or under Schedule 1 to the Graduated Retirement Benefit Regulations.
9
Where a claimant is in receipt of any benefit (other than housing benefit) under the benefit Acts and the rate of that benefit is altered with effect from a date on or after 1st April in any year but not more than 14 days thereafter, the relevant authority shall treat the claimant as possessing such benefit at the altered rate—
a
in a case in which the claimant's weekly amount of eligible rent falls to be calculated in accordance with regulation 61(2)(b) F5or (c) (calculation of weekly amounts), from 1st April in that year;
b
in any other case, from the first Monday in April in that year,
to the date on which the altered rate is to take effect.
10
In the case of a claimant who has, or whose partner has, an award of state pension credit comprising only the savings credit, where a relevant authority treats the claimant as possessing any benefit (other than housing benefit) at the altered rate in accordance with paragraph (9), that authority shall—
a
determine the income and capital of that claimant in accordance with regulation 27(1) (calculation of claimant's income in savings credit only cases) where the calculation or estimate of that income and capital is altered with effect from a date on or after 1st April in any year but not more than 14 days thereafter; and
b
treat that claimant as possessing such income and capital at the altered rate by reference to the period referred to in paragraph (9)(a) or (b), as the case may be.
F611
For the purposes of paragraph (8), a person is not to be regarded as depriving himself of income where—
a
his rights to benefits under a registered pension scheme are extinguished and in consequence of this he receives a payment from the scheme, and
b
that payment is a trivial commutation lump sum within the meaning given by paragraph 7 of Schedule 29 to the Finance Act 2004.
12
In paragraph (11), ”registered pension scheme” has the meaning given in section 150(2) of the Finance Act 2004.