UC/LWCRA and Ill health retirement lump sum

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NikkiP50

Hi all, my first post on here 😊. I am in the process of ill health retirement and have been told I can take a lump sum payment from my pension. One option is below 16k but above the 6k cut off and the other is over 16k. I currently claim UC/LWCRA and PIP. I am completely unsure on which lump sum to take?. If I take the lower amount I have read that I will keep my benefits but they will be reduced, as its over 6k and if I take the larger amount my benefits will be stopped. I hope I've got this correct so far?. It also states that within 6 months you can start a reclaim (if I opt for the larger amount). My concerns are how easy and quick is the reclaim and what is the process? Also I have read that LWCRA is not included on the reclaim?. I am in a complete pickle with it all. I need to buy a new car more suitable for my disability, one that's easy for me to get in and out of (I don't drive but my partner does) and buy a mobilty scooter to give me independence and clear some debts. Unfortunately I missed out on the higher rate of mobility. Anyway any advice would be greatly appreciated and apologies for my long story! Many thanks all

OverlyAnxious

Hi,

Unfortunately, under current rules, when a claim is closed by excess savings (which a pension lump sum is counted as) the UC claim cannot be reopened again. The only option is to start a brand new claim, and that will not include LCWRA until you go through the work capability assessment again.

When a claim is closed by excess earnings (work), that is when it can be reopened within 6 months.

I do have a theory…that if we choose to close the claim ourselves while still below £16k, that should allow it to be reopened within 6 months, instead of it being automatically closed by the £16k savings. But so far I have not found any proof of this, or anyone that has actually done it, so I cannot recommend it.

At the moment my recommendation would be to keep well below £16k so there's no risk of accidentally going over.

Repaying debts is allowed by UC and that shouldn't be seen as deprivation. Buying a mobility scooter should also be fine. Buying a car is a bit of a grey area, as there are no hard rules about it, but obviously if you buy a Bentley they're likely to say that's unreasonable, even if they are easy to get in & out of!