Will i get in trouble for working while i have pension credit?

Pension credit: My husband was working 20 hours a week – could he be in trouble because of this? (Archive image)

My husband had been working for a little over a year in 2017 and 2018.

We get state pension and pension credit along with other benefits, but since we have AIP [Assessed Income Period] he didn’t think it was necessary to mention it.

He is now very upset because of this, even though the work was only 20 hours a week. Will he be in a lot of trouble about it now?


Steve Webb responds: Before answering your specific question, it might be helpful if I explain what a “taxable income period” is and what it is for.

The pension credit is a benefit for low-income retirees that was introduced in 2003.

Most beneficiaries are retired and have relatively stable incomes, perhaps outside of annual increases in their public and private pensions to cope with inflation.

So the government decided that instead of having to do complicated recalculations every time someone had a small change in their income, they would put in place a system where most beneficiaries would not have to report small amounts. changes to their pensions and savings.

Beneficiaries over 65 received an AIP in which they did not have to report pension changes, but were required to report other changes in circumstances.

For people aged 65 to 75, these PDAs were usually time-limited (after which a full review would be undertaken), but for those over 75, they were often indefinite.

From 2016, the government decided to do away with the idea of ​​AIPs, but for those who had already benefited from them, they would only be phased out gradually.

In your case, I’m assuming that an AIP was put in place before April 2016 and was still in effect in 2017/18 when your husband was working.

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below

I am concerned that even for someone with an AIP, taking a job would be considered a “change of circumstances” which had to be notified to the Department of Work and Pensions.

The leaflet accompanying the AIP should have listed the things you did and didn’t have to tell them, but I understand these are complicated questions and I can understand why your husband may have been confused.

If you still have the flyer, you might want to see if it’s clear on what to do if you find a job while on pension credit.

If your husband contacted the authorities now, there is a very low chance that they will conclude that he deliberately attempted to defraud them and take action against him.

But I think it’s extremely unlikely. If he contacted them voluntarily (rather than waiting for them to contact him), and said he now realized that he should have declared his winnings and wanted to refund any overpayment, it is difficult to imagine a particularly harsh answer.

I imagine they would ask for details of his earnings at the time, determine what pension credit he should have received, and then demand reimbursement of any overpaid benefits.

If money is tight for you as a couple, you may be asked to spell out the details of your expenses and then be able to agree to repay the overpayment in several affordable installments.


Former Pensions Minister Steve Webb is This Is Money’s Agony uncle.

It’s ready to answer your questions, whether you’re still saving, quitting work, or juggling your finances in retirement.

Since leaving the Department for Work and Pensions after the May 2015 election, Steve has joined the Royal London pension company as Policy Director.

If you would like to ask Steve a question about pensions, please email him at [email protected]

Steve will do his best to respond to your post in a future column, but he won’t be able to respond to everyone or correspond privately with readers. Nothing in his responses constitutes regulated financial advice. Posted questions are sometimes edited for brevity or other reasons.

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If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a government-backed organization that offers free assistance to the public. TPAS can be found here and its number is 0800 011 3797.

StevWe receive many questions about the state pension forecast and about COPE – the equivalent of contracted retirement. If you write to Steve on this topic, he answers a typical reader question. here. It includes links to several of Steve’s previous columns on state retirement forecasting and contracting out, which might be helpful.

If you have a question about state pension supplements, Steve wrote a guide that you can find here.


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