9 - State Schemes and an Individual pension planning

Question 1

What is the Basic State pension
How many years qualifying
Is it means tested?

Answer 1

Before 6 April 2016 -
Non means tested payable to employed, self-employed and other individuals who have sufficent NICs
Between 2010-2016 30 qualifying years

Question 2

What was the qualifying years for someone who reached SPA before 6 April 2010

Answer 2

90% of working life to qualify
49 Years male
44 years female

Question 3

What was the min amount needed for M/F to receive any BSP

Answer 3

25% Of max
11 Males
10 Female

Question 4

Who can claim category B pension

Answer 4

Dependent who has reached SPA with less than 18 qualifiying years
can clain additional income from spouse called category B pension

Conditions:
Spouse had to be entitled to full category A pension when reaching SPA (Before 2016)
if not Category B pension reduced proprotionately

Question 5

Do Category B pensions still exist now?

Answer 5

No, but remain active if people claimed SPA before 6/04/2016

Question 6

T/F: Graduated retirement benefit and State Earnings related Pension scheme were available for the self-employed?

Answer 6

False

Question 7

T/F: You could contract out of Additional state pension scheme

Answer 7

True via employer contracted out defined benefit scheme.

Question 8

What are some conditions if a member works abroad and wants to pay NICs in UK

Answer 8

Work in EU temporarily for up to 2 years
Multi-state worker working in UK and one or more EU country
Civil servant working for government
Working onboard a vessel at sea UK flag
Working at flight - where home is UK

Question 9

Where do different rules apply for working abroad and paying NICs into UK

Answer 9

Iceland
Lichetenstein
Norway
Switzerland

Question 10

What were the two calculations for individuals who had not reached SPA on 06/04/2016

Answer 10

Entitlement under pre-6 april 2016 SP rules - total benefits accured under the BSP and athe additional state pension with deduction to account for any years where individual was contracted out

If total exceeds £155.65 per week then ecess is protection payment

Entitlement under new state pension - calculated as if the new state pension had been in place at start of their working llife with a reduction where individual was contracted out

Total cannot be greater than 155.65 per week

Question 11

What is protected payment part in pension pre 6 april 2016

Answer 11

When individual reaches SPA - protected payment will paid on top of new SP
Protection payment increases each year in line with CPI

Question 12

What is a qualifying year in SP

Answer 12

52 weeks of class 1/class 2 NICs paid in a yax year

Question 13

What is Class 3 Nics

Answer 13

Voluntary and for people with inadequate NICs

Question 14

What are Class 3A NICs

Answer 14

12 October 2015 and 5 April 2017

Income purchased by making Class 3A NICs increases in payment with CPI and provides 50% survivng spouse/ civil partner pension on death of individaul who purchase income

Question 15

SPA before 06/04/2016
Deferral rules

Answer 15

5 weeks deferral
SP increase by 1% every 5 weeks delaying up to 10.4% py
if defers SP by 12 months they can receive lump sum

Question 16

SPA after 06/04/2016
Deferral rules

Answer 16

9 weeks deferral
SP increase by 1% for every 9 weeks deferral up to 5.8%
no option of lump sum

Question 17

How can an individual be entitled to annual increase to state pension

Answer 17

UK for six months or more each year
an EEA country
gibralter
switzerland
A country that has reciprocal social security agreement with UK

Question 18

What are the conditions for state death benefits

Answer 18

deceased spouse must pay class 1/class 2 NICs for 25 weeks in one tax year prior to death/ death must be job related accident or illness
Surviving spouse must be under SP age and living in UK

Question 19

Can you claim bereavement support if you are in prison

Answer 19

no

Question 20

What are the two rates of bereavement support

Answer 20

Higher: £3.5k initial - £350pm for max 18 months
Standard: £2.5k initial - £100pm for max 18 months

Question 21

When should a claim be made if the surviving spouse wants all the money

Answer 21

Within 3 months of death

Question 22

What happens if claim is made after 3 months of spouse death (State pension)

Answer 22

Payments can be backdated for a period of no more than 3 months

Question 23

What happens if claim is made more than 12 months after spouse death?

Answer 23

Initial payment not made

Question 24

Who is entitled to higher rate

Answer 24

Those pregnant or entitled to child benefit

Question 25

Are bereavement support payments taxed

Answer 25

no

Question 26

What is the max a widow/civil partner can inherit of S2P

Answer 26

50%

Question 27

What are the two parts of Pension credit

Answer 27

Guarantee credit
Saving credit

Question 28

What age do you have to be to make claim on guarantee credit

Answer 28

Pension credit qualifying age (same age as claimant state pension age)

Question 29

Since 2019 - what happens to claimant age to claim guarantee credit

Answer 29

both parties have to reach pension credit age

Question 30

What is the guarantee credit threshold for individual

Answer 30

£201.05 per week

Question 31

What is the guarantee credit threshold for couple

Answer 31

£306.85

Question 32

Does guarantee credit work with BSP

Answer 32

yes, it tops up BSP to a max of theshold of
201.05 pw for individual
or 306.85 couple

Question 33

How many individuals must satisfy conditions for saving credit

Answer 33

1 in a couple prior to 6 april 2016

Question 34

What is the income that is calculated for SP credit

Answer 34

State pension
private pension
earnings
most social security benefits
savings over 10k