Crosswords2 mins ago
Is The State Pension A Benefit?
I read a story in the news today about how 'potentially' the state pension 'could' be means tested in the future - the actual story was about the government putting through legislation to grant access to your bank details to combat fraud. One thought that came from the article was using it to means test people for benefits and state pensions. As income tax can be applied on a state pension then surely the state pension is not a benefit, but is being treated as one, what are other peoples take on this?
Indeed. The word "benefit" when used in connection with pensions is not the same as when it is used in connection with (for example) Jobseekers' Allowance. Pension schemes are operated with contributions (from its members) and benefits paid out to them in retirement.
The problem with the State Pension scheme is large numbers of its recipients have not funded their benefits (either fully or not at all). This moves those recipients from the "benefits" of a pension scheme to the "benfits" provided by the State. provided by a traditional pen
It's only loosely linked to contributions though canary.
You get the full state pension provided you paid enough NI contributions- but one recipient may have paid hundred times more NI than the other, and the pension claimed over a lifetime can far outweigh what some pay in NI. So to me it's a benefit. But I don't think it matters what you call it. Some could argue UC, for example, isn't really a benefit as you could have paid income tax and VAT.
There's often scare stories about means testing state pension but we know no government would ever try. They're even afraid of scrapping the £10 Xmas Bonus or ending he triple lock
Here Tilly - it won't apply to pensions, only pension credit. But it is invidious.
I have just read this:
Currently, if the DWP suspects someone of fraud they have to individually request their details from their bank. Under the new plans, banks will be forced to run monthly or even weekly checks to see if any “red flags” are picked up.
It seems no different to me than banks flagging up suspected money laundering