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LCWRA and earnings.

andyinmanch

Hi,

After a 6 month wait I've just had my WCA. They told me it could be 2 months before I'm given their decision. I'm currently on 0 award UC, as I had drawn down £5,500 in June, from a private pension and this counts as earnings. If I draw down again, how will this impact my payment if awarded LCWRA? I can't find anything online about this. I've been awarded PIP, if this factors in.
Many thanks.

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Comments

poppy123456

A lump sum draw down of a pension isn't classed as earnings, it's classed as savings so it won't affect your UC unless it takes you over the savings limit. For every £250 or part there of over £6,000 there's a £4.35/month deduction. For savings of more than £16,000 then there's no entitlement to UC.

A weekly/monthly drawndown amount is classed as "other income" and will reduce your UC £1 for £1.

PIP makes no difference because that's not means tested.

With regards to your UC being reduced to zero, are you claiming UC with a partner that works or working yourself? Do you receive a weekly/monthly income from a pension?

andyinmanch

Thanks for the reply.
It was a one off lump sum taken in June. I'm not claiming with a partner and I don't receive a weekly/monthly income from a pension. I informed them off my £4,500 one off draw down when I applied for UC in June. They informed me that that because of my lump sum, I get a monthly 0 award until next April. I'm running out of money so if I have to wait 2 months for my WCA ruling, I'm considering a small lump sum draw down. I'm concerned this will affect my payments if I'm awarded LCWRA.
Thanks.

calcotti

andyinmanch said:, …as I had drawn down £5,500 in June, from a private pension and this counts as earnings.

Pension income never counts as earnings. Regular pension payments are unearned income. One off payments are capital.

If they treated a one off pension payment as unearned income rather than capital you should ask them to review that decision. Did you make it clear to them at the time that it was a one off payment?

A one off lump sum withdrawal should be treated as capital.

I you start making several withdrawals they are more likely to treat it as income.

Even if they treated the withdrawal in June as unearned income it makes no sense for this to result in a nil award until April next year.

Have you had statements after you claimed showing nil payable. If so would you be willing to post details?

calcotti

If they have treated the withdrawal as income you should ask for a review of that decision and you can refer them to the following.
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/778104/admh1.pdf

H1021 A payment is capital if it is
1. not made or due to be made regularly and
2. made without reference to a period.
The payment is income if this does not apply

Also
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/778262/admh5.pdf

H5174 Whilst a claimant’s pension pot is held by the pension provider then the value of the right to that sum falls to be disregarded as capital for the purposes of UC. Pension flexibilities allow people to withdraw money from their pension pot. This is known as a drawdown. If the claimant has withdrawn money from their pension pot then a determination has to be made as to how this is to be treated for the purposes of UC.

H5175 Where a claimant chooses to
1. take ad-hoc withdrawals or
2. take the whole sum
then the amount withdrawn falls to be treated as capital. (see ADM Chapter H1).

H5176 Where a claimant chooses to withdraw amounts on a regular basis then those amounts fall to be treated as income and taken into account as such

However I remain baffled as to how, even if treated incorrectly as unearned income this could result in no entitlement until April.

Can you confirm that you have no other savings/capital. Was your total capital ever over £6,000? Do you have any other income besides PIP?

andyinmanch

This is copied from my online account. It's the same info for the previous months since I started my claim.

Your payment this month is £0

What you're entitled to

Standard allowance

£334.91

You get a standard amount each month. You said you're single

Total entitlement before deductions

£334.91

What we take off (deductions)

Other income

minus ‑ £341.66

We take money off your payment for other income that you have. For example, pensions and educational grants.

Total deductions

minus ‑ £341.66

I have no other savings/capital and was never over £6,000. I don't have any other income besides PIP.

I'm grateful for your help, thank you.

calcotti

That seems completely incorrect. You should request a Mandatory Reconsideration of your UC payments since the start of your claim. State that you do not understand how the figure of £341.66 for unearned income is arrived at. State that you understand that they may have treated your lump sum pension withdrawal of £5500 as unearned income but you believe that it should have been treated as capital and that had it been treated as capital you would have been entitled to receive UC payments. Refer to the guidance I quoted.

Unfortunately an MR can take up to 12 weeks to be decided.

If the MR comes back unchanged I would appeal to the tribunal service.

I still have no idea how they have concluded that you will become due in April!

andyinmanch

I will do as you suggest. Once again, thank you for all your informative replies.

Cheers

Andy

calcotti

Just to double check - you’re not receiving new style ESA are you?

andyinmanch

No.

calcotti

Makes no sense, challenge it.

poppy123456

Just to also point out, had your UC been correct and you had received the correct payments you would have also been entitled to the 2nd Cost of living payment of £324, which was paid between 8th and 23rd November.

Once your payments have been sorted you need to report a missing payment. https://www.gov.uk/guidance/cost-of-living-payment#report-a-missing-cost-of-living-payment

andyinmanch

You've been brilliant. Thanks.

andyinmanch

An update. I provided all the info you kindly provided and asked them to review my nil awards.
My case manager left me the following-

"In relation to your other income deduction, you have reported that you receive a pension with the amount stated '£4100.00' and that this amount is received yearly. As per universal credit policy as per what you reported, the pension is treated as other income."

I have told him this is not true and it was a one off drawdown. He doesn't instil me with confidence. When had also asked him to review the latest cost of living award, he replied with info on cold weather payments.
I asked to look again or I will go to judicial review.

Thanks
Andrew

poppy123456

If this was the MR decision you can now proceed to Tribunal.

andyinmanch

Thanks Poppy.

calcotti

andyinmanch said:

... I had drawn down £5,500 in June, from a private pension ..

andyinmanch said:

My case manager left me the following-

"In relation to your other income deduction, you have reported that you receive a pension with the amount stated '£4100.00' and that this amount is received yearly."

I wonder why they have come up with £4,100 if you reported a withdrawal of £5,500?
(I note however that in another post you referred to £4,500.)

Looking back at this I do wonder if you entered the information in the wrong place when you claimed. I don't know how the questions are asked during the claim process. Even if you did enter it wrongly at the start they should be able to correct it.

andyinmanch

You're spot on re the amount I drew down. Apologies for the inconstency re the different amounts. I've checked, I drew down £4,200. I don't know why my case manager said £4,100. My draw down was over 6 months ago. I may have entered things wrong. I'm 60, the last time I "signed on" was when I was 17. I'm grateful and not trying to confuse.