Pension Credits – Recovery from Estates

Throughout the years, we have increasingly found that the Department for Work and Pensions (DWP) often miscalculate the amount paid to an individual with regards to their benefits. As such, we have found that the DWP will either recover these monies during a person’s lifetime or, if the mistake was realised too late, then from their estate. We have, as a result, found that where the latter is relevant the matter will be raised long after the estate has been distributed.

This article will focus upon Pension Credits and overpayments of the same.

What are Pension Credits?

Pension Credits are a means tested income related benefit which essentially means that the DWP will look at your financial situation when assessing your eligibility, and is spilt into two parts; Guarantee Credit and Savings Credit.

In order to receive Guarantee Credit, you must live in the United Kingdom and you or your partner must have reached the Pension Credit qualifying age. In order to qualify for Savings Credit, you or your partner must be 65 or over.

If you are lucky enough to qualify for the above, then it is essential that you inform the DWP of a life changing event where you are one of those fortunate few who has to partake in an Assessed Income Period (AIP) assessment. This is applicable to those who are over the age of 65 where the following must be disclosed:

  • If you become a member of a couple; or
  • If you or your partner moves into a care home on a permanent basis.

An increase in your capital will not be used for the purposes of the assessment.

Where the above is applicable, the AIP will cease and a full review of your benefit entitlement will be undertaken.

An increase in your capital will not be used for the purposes of the assessment.

For further information relating to eligibility, please consult the DWP website.

Recovery from Estates (RFE)

If an individual has made an incorrect statement, the DWP will look into it and recalculate that person’s financial circumstances and the amount due from the person’s estate. The amount overpaid will be the difference between the correct amount and the actual amount payable. Even if the mistake is genuine they will nevertheless look to recover the monies as it is a loss of public funds.

By way of a “giving you the whole picture” exercise, and certainly not to scare you, the RFE in carrying out their assessment will want details of assets held on the date the Pension Credit application was made and will compare these with the assets in the estate. The RFE will ask you to obtain the relevant information from bank/building societies and request information from the date shown in their letter. These institutions should hold relevant information dating back some 6 years. However, if the information is not available, then the earliest possible information may suffice. Please note that it is likely that the RFE will ask for additional information in relation to transactions over £5000 together with regular direct debits and credits made to and from the account.

How much is the overpayment going to be and how long will this take?

The amount owed may equate to the amount of Pension Credit paid or a reduced amount may be owed.

The length of the matter is difficult to estimate.

If you have a query or would like to book an appointment please get in touch with our First Contact team on 01256 320555 or email mail@clarkeandson.co.uk