Should Irish State Pension be taken into account as income for the purposes of State Pension Credit?

Tuesday 18 August 2009

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In CPC/571/2008 [2009] UKUT 55 (AAC), an Upper Tribunal Judge (formerly a Social Security Commissioner) decided that the Department had been wrong to have regard to the claimant's Irish state pension as income for the purposes of calculating his entitlement to State Pension Credit.

While State Pension Credit is means-tested the award is based on an assessed income period, which normally lasts some 5 years during which any income from a retirement pension which was not expected at the date State Pension Credit was awarded must be ignored. The substantive question in CPC/571/2008 was whether a foreign state pension (as opposed to a private pension) should be ignored during the assessed income period.

The Judge held that the Irish state pension (which had been paid pro-rata under EU law) was part of the claimant's 'retirement provision' which should be ignored during the assessed income period. This was on the grounds that it was income from "an overseas arrangement" which could include both state and private pensions. As a result of the Upper Tribunal's decision, the claimant was entitled to arrears of benefit equivalent to the deductions that had been made to take his Irish state pension into account during the assessed income period.

The Department has issued official guidance on the impact of the ruling in CPC/571/2008: see Memo DMG 28/09: 'Treatment of Foreign State Pensions in SPC'.

The claimant was represented by Desmond Rutledge (a member of the Welfare Benefits Team at Garden Court) who was instructed by the Public Law Project.

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