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. The DWP assesses your financial situation to determine eligibility, splitting it into 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 applies to those over the age of 65, who must disclose the following:

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

The assessment will not consider an increase in your capital.

If the above applies, the AIP will cease, and they will conduct a full review of your benefit entitlement.

The assessment will not factor in an increase in your capital.

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

Recovery from Estates (RFE)

If an individual provides incorrect information, the DWP will investigate, recalculate finances, and determine the amount due from the 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 still recover the money 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 DWP may require repayment of the full Pension Credit amount or a reduced sum, depending on the circumstances.

The length of the matter is difficult to estimate.

For queries or to book an appointment, call 01256 320555 or email mail@clarkeandson.co.uk.