9 - State Schemes and an Individual pension planning Flashcards
What is the Basic State pension
How many years qualifying
Is it means tested?
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
What was the qualifying years for someone who reached SPA before 6 April 2010
90% of working life to qualify
49 Years male
44 years female
What was the min amount needed for M/F to receive any BSP
25% Of max
11 Males
10 Female
Who can claim category B pension
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
Do Category B pensions still exist now?
No, but remain active if people claimed SPA before 6/04/2016
T/F: Graduated retirement benefit and State Earnings related Pension scheme were available for the self-employed?
False
T/F: You could contract out of Additional state pension scheme
True via employer contracted out defined benefit scheme.
What are some conditions if a member works abroad and wants to pay NICs in UK
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
Where do different rules apply for working abroad and paying NICs into UK
Iceland
Lichetenstein
Norway
Switzerland
What were the two calculations for individuals who had not reached SPA on 06/04/2016
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
What is protected payment part in pension pre 6 april 2016
When individual reaches SPA - protected payment will paid on top of new SP
Protection payment increases each year in line with CPI
What is a qualifying year in SP
52 weeks of class 1/class 2 NICs paid in a yax year
What is Class 3 Nics
Voluntary and for people with inadequate NICs
What are Class 3A NICs
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
SPA before 06/04/2016
Deferral rules
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
SPA after 06/04/2016
Deferral rules
9 weeks deferral
SP increase by 1% for every 9 weeks deferral up to 5.8%
no option of lump sum
How can an individual be entitled to annual increase to state pension
UK for six months or more each year
an EEA country
gibralter
switzerland
A country that has reciprocal social security agreement with UK
What are the conditions for state death benefits
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
Can you claim bereavement support if you are in prison
no
What are the two rates of bereavement support
Higher: £3.5k initial - £350pm for max 18 months
Standard: £2.5k initial - £100pm for max 18 months
When should a claim be made if the surviving spouse wants all the money
Within 3 months of death
What happens if claim is made after 3 months of spouse death (State pension)
Payments can be backdated for a period of no more than 3 months
What happens if claim is made more than 12 months after spouse death?
Initial payment not made
Who is entitled to higher rate
Those pregnant or entitled to child benefit
Are bereavement support payments taxed
no
What is the max a widow/civil partner can inherit of S2P
50%
What are the two parts of Pension credit
Guarantee credit
Saving credit
What age do you have to be to make claim on guarantee credit
Pension credit qualifying age (same age as claimant state pension age)
Since 2019 - what happens to claimant age to claim guarantee credit
both parties have to reach pension credit age
What is the guarantee credit threshold for individual
£201.05 per week
What is the guarantee credit threshold for couple
£306.85
Does guarantee credit work with BSP
yes, it tops up BSP to a max of theshold of
201.05 pw for individual
or 306.85 couple
How many individuals must satisfy conditions for saving credit
1 in a couple prior to 6 april 2016
What is the income that is calculated for SP credit
State pension
private pension
earnings
most social security benefits
savings over 10k
