DWP recovery from estates- pension credits

[no1 nut]

mw mother died 8 years ago and at the time was in receipt of pension credits. All the information at the time of the assessment was correct.
One element of her income was a pension entitlement from her husbands company pension. I have recently been told that the original pension calculation was incorrect and her estate is now entitled to recover the difference.
The difference is significantly big enough to alter her income tax and pension credit entitlement for the four years prior to her death.

Are the HMRC and DWP entitled to recover the difference after this period of time or is there a time limit in place ie. 6 years.

[enaid]

Re: DWP recovery from estates- pension credits

Hi and welcome, must admit I am a little confused.
You say all the info was correct at the initial assessment and this included entitlement to her husbands pension, was she actually in receipt of the pension and was it included in the assessment?
You then say the calculations were wrong and the estate is now entitled to recover the difference, can you explain that please.

as for the dwp and time barring, overpayments are never time barred the 6 years means no court action can be taken after the 6 years although they can still deduct from future benefits etc without going to court. Please also note the 6 years only starts from the date of the final decision so it's not 6 years since the payments but 6 years from when they decided it was overpaid.

Benefit Overpayments & Social Fund Loans

The Department of Work & Pensions (DWP) has 6 years to take action through the courts to recover benefit overpayments and social fund loans. This time starts running from the date of the final decision made on the overpayment and from when the social fund loan was due to be paid. But the DWP are still allowed to make deductions from your benefit for a debt over 6 years old as they don’t need to go to court to do this. This applies to overpayments of benefits such as income
support, job seekers allowance, pension credit, housing benefit, council tax benefit and paying back social fund loans.

If your mum had an Assessed Income Period along with her Pension Credit the rules below apply

If you are over the age of 65 you may have been given a Pension Credit award that lasts for 5 years or longer. This is known as the assessed income period (AIP). During this period annual adjustments will be made automatically for increases in your state and private pensions and you do not need to report most changes in income, such as increases in your savings, private pensions or income from annuities.
Since April 2016, no new Assessed Income Periods have been set meaning changes to your income and capital must be notified in the usual way.
If your Assessed Income Period is due to end before 31 March 2019 it will come to an end on the date on your award letter or sooner if you have a change of circumstance such as entering a care home. If your Assessed Income Period is due to end after 1 April 2019 it will actually end sooner, you will receive a letter giving you 6 months notice of the new end date.
It is useful to record when your assessed income period ends so that you know when award changes may take effect. The calculator’s estimate should be checked again when the assessed income period ends.
Indefinite assessed income periods

You may have a Pension Credit award with an indefinite assessed income period (open-ended AIP) if you or your partner are aged 75 or over.
This means you no longer have to report changes to most kinds of income you receive, unless the change would increase the amount of Pension Credit you receive. Changes you do not have to report if you have an open-ended AIP include:

• income from equity release schemes
• income from annuities or private pensions
• savings or investments

If you have a open-ended AIP it will remain in place until your circumstances change.

[Debt Camel]

Re: DWP recovery from estates- pension credits

So the estate is being offered a large lump sum to correct the underpayment of pension?

I am guessing here, I haven't seen a case like this.

It may be that basic rate tax would be deducted from that amount so you would have to try to reclaim any, rather than HMRC having to make a claim for underpayment of tax.

I would guess there is likely to be a claim for an overpayment of pension credit. I doubt the 6 year rule is relevant as that time only starts when there is a cause of action - ie when it was realised there was a problem. That would be this year, not when your mum died.

[no1 nut]

Re: DWP recovery from estates- pension credits

Hi gents
thanks for responding, sorry for confusion what actually happened was this

when my mother was alive, I managed to claim pension credits, housing benefit etc. part of her income was the widow entitlement from my fathers company pension. all the info used for the claims was correct at the time of the claims.
When she died I did probate and DWP were happy and signed off any liabilities. Thought it was all done and dusted eight years ago.

Recently I have been informed, following a review the company pension scheme calculated the pension entitlement incorrectly and want to now pay it to the estate. The outstanding amount is significant enough to change all her entitlements to benefits over 4 years. Which now opens a can of worms.

As you say when they pay it they will pay tax at basic rate, or I could try to get the income allocated to the appropriate years by agreement with HMRC. The problem being that either way pandora's box gets opened
hence my question about wether the the time limit would apply

hope this is clearer

[enaid]

Re: DWP recovery from estates- pension credits

As I see it and this is only my opinion, DWP are a law unto themselves, your mother didn't receive the higher pension through no fault of her own so no fraud was committed.
In my previous post I put the info about Assessed Income Periods if your mum was in an AIP then most changes do not have to be reported including increases in private pensions which in my opinion thi is exactly what this was.

[Debt Camel]

Re: DWP recovery from estates- pension credits

no fraud was committed.

No one is suggesting that there is any question of fraud.

if your mum was in an AIP then most changes do not have to be reported including increases in private pensions which in my opinion this exactly what this was.

Well possibly, but it seems much more likely that she incorrectly (if inadvertently) reported the wrong private pension income at the start of her pension credit claim. I doubt that would fall under the AIP exemption from reporting.

[enaid]

Re: DWP recovery from estates- pension credits

Well just my opinion again but she could hardly report something that did not become apparent till after she had passed away.
The reason I mentioned fraud although it was never suggested is because of this rule.

What if I did not misrepresent or fail to disclose?If the benefits office decides that the overpayment was not caused by your misrepresentation or failure to disclose, theoverpayment will not be recoverable and you cannot be made to repay it.No civil penalty can be imposed if the overpayment is not recoverable.