UK state benefits and pensions discussion

[Barry]

Moderator note:
This post and subsequent posts have been moved from this thread:
David Tuller: Trial By Error: The Cochrane Controversy

I wasn't going to look into social harm, but I think its worth investigating. Good point.

There is also financial hardship/harm, including (in the UK at least) financial harm that can have far reaching implications when someone retires. There are some sickness benefits which count as credits towards your state pension when you retire, in lieu of the national insurance contributions that you would otherwise have paid if working. But I'm pretty sure people with mental illnesses do not get that kind of benefit, so do not accrue state pension benefits. So people with a physical illness, incorrectly diagnosed as a mental condition, will be denied a chunk of their state pension in due course, which they should in reality be entitled to. No doubt a strong motivation for the DWP, including the MUS moves.

 

[Trish]

There is also financial hardship/harm, including (in the UK at least) financial harm that can have far reaching implications when someone retires. There are some sickness benefits which count as credits towards your state pension when you retire, in lieu of the national insurance contributions that you would otherwise have paid if working. But I'm pretty sure people with mental illnesses do not get that kind of benefit, so do not accrue state pension benefits. So people with a physical illness, incorrectly diagnosed as a mental condition, will be denied a chunk of their state pension in due course, which they should in reality be entitled to. No doubt a strong motivation for the DWP, including the MUS moves.

As I understand it in the UK anyone who is unable to work and getting state unemployment (JSA) or equivalent benefits for if you are too sick to work (ESA), automatically gets the national insurance credit which counts towards their state pension (the amount of which is based on number of years paying national insurance). As far as I know no distinction is made between mental and physical disability provided you are getting JSA or ESA.

 

[Sly Saint]

There are some sickness benefits which count as credits towards your state pension when you retire, in lieu of the national insurance contributions that you would otherwise have paid if working. But I'm pretty sure people with mental illnesses do not get that kind of benefit, so do not accrue state pension benefits.

I don't think that is correct. As far as I know, anyone in receipt of ESA, regardless of what their illness is, receives national insurance credits and I think the same applies to Universal credit.
Additional disability benefits (ie DLA/PIP) don't have an NI component.

https://www.gov.uk/national-insurance-credits/eligibility

Of course the main stumbling block is actually passing the relevant 'tests' to be deemed eligible for the benefit in the first place.

eta: anyone concerned can request what NI contributions they have accrued and also (although it's a separate application) what state pension they can expect to receive when they retire (on the gov.uk website somewhere).

 

[Barry]

As I understand it in the UK anyone who is unable to work and getting state unemployment (JSA) or equivalent benefits for if you are too sick to work (ESA), automatically gets the national insurance credit which counts towards their state pension (the amount of which is based on number of years paying national insurance). As far as I know no distinction is made between mental and physical disability provided you are getting JSA or ESA.

I don't think that is correct. As far as I know, anyone in receipt of ESA, regardless of what their illness is, receives national insurance credits and I think the same applies to Universal credit.
Additional disability benefits (ie DLA/PIP) don't have an NI component.

https://www.gov.uk/national-insurance-credits/eligibility

Of course the main stumbling block is actually passing the relevant 'tests' to be deemed eligible for the benefit in the first place.

eta: anyone concerned can request what NI contributions they have accrued and also (although it's a separate application) what state pension they can expect to receive when they retire (on the gov.uk website somewhere).

OK, I'll have to come back to that. I was certain when I looked at this a few years back there was an issue of some kind, but maybe something has changed, or I was simply wrong. Will dig a little more in due course.

 

[Trish]

OK, I'll have to come back to that. I was certain when I looked at this a few years back there was an issue of some kind, but maybe something has changed, or I was simply wrong. Will dig a little more in due course.

Problems could arise if you are not on benefits that are designed to replace income and to cover normal living costs (JSA and ESA). If someone is supporting you for your living costs, but you are on PIP which is meant to cover the extra costs of being disabled, you don't get NI contributions covered. I think the only way around that would be to class yourself as 'self employed' with a zero income, and pay the self employed NI contributions.

 

[NelliePledge]

Problems could arise if you are not on benefits that are designed to replace income and to cover normal living costs (JSA and ESA). If someone is supporting you for your living costs, but you are on PIP which is meant to cover the extra costs of being disabled, you don't get NI contributions covered. I think the only way around that would be to class yourself as 'self employed' with a zero income, and pay the self employed NI contributions.

If you have employers Ill Health Retirement you only get contributions based ESA for any period when you’re no longer being paid statutory sick pay before the retirement pension comes into force. After you start getting the works pension if your income is above a certain amount they don’t give you any ESA but will still give you credit for National insurance contributions to go towards State Pension entitlement. after 12 months of contributory ESA you then have to pay voluntary NI contributions (called class 3 contributions) to make up any shortfall in your contributions to get a full state pension or if you decide not to you have a reduced pension.

 

[Andy]

I think the only way around that would be to class yourself as 'self employed' with a zero income, and pay the self employed NI contributions.

This is the route that I have taken, after my wife and I decided that the risk to my health and/or functioning from trying to navigate the benefits systems wasn't worth. Obviously though our financial situation is one that so many patients won't be in, a supportive partner who earns enough so that we can live off of her wage, and the lack of a mortgage (we came into enough money to pay it off) puts us into a very fortunate position.

 

[MEMarge]

This is the route that I have taken, after my wife and I decided that the risk to my health and/or functioning from trying to navigate the benefits systems wasn't worth. Obviously though our financial situation is one that so many patients won't be in, a supportive partner who earns enough so that we can live off of her wage, and the lack of a mortgage (we came into enough money to pay it off) puts us into a very fortunate position.

Thanks for this @Andy, it may well be a useful route for me to take as I need an extra 5 or so years of contributions. The £3 or so a week sounds a great deal more reasonable than the thousands they have qouted me.

Now, what shall I set myself up as:

• Chronic illness advocate
• PIP adviser
• Jewellery maker
• Tutor ?

Other reasonable suggestions appreciated

 

[Andy]

Thanks for this @Andy, it may well be a useful route for me to take as I need an extra 5 or so years of contributions. The £3 or so a week sounds a great deal more reasonable than the thousands they have qouted me.

Now, what shall I set myself up as:

• Chronic illness advocate
• PIP adviser
• Jewellery maker
• Tutor ?

Other reasonable suggestions appreciated

Definitely read up more about the various options, my solution for my situation might not suit yours. For starters, in regard to topping up the state pension, this article seems a pretty good place to start, https://www.which.co.uk/money/pensi...on/can-i-top-up-my-state-pension-an0q09p37nsj

 

[arewenearlythereyet]

I have had to reconsider what to do about retirement. my last employer couldn’t get their head around chronic vs acute initially and when I returned to work they assumed I would recover. 2 years in (when I was working full time but with hard fought for adaptations) and they realised that I wouldn’t be recovering they made me redundant.

Ive got at least 10 years to go until retirement, so I have a new more manageable job for the moment (fingers crossed for no decline in next 10 years or so). My partner works for herself in our business, but because I am a director of the business (albeit a sleeping one) I can also receive pension payments to offset our corporation tax in addition to the pension I get from my full time job...obviously after we have drawn what we need to survive.

My plan is to see how it goes with the job but flex the business ‘income’ and optimise our tax burden and give myself the flexibility to reduce working hours if necessary in the future. Hope that makes sense.

I realise that’s quite lucky to have these options. I guess the point I was trying to make is that having a business account has pension payment benefits as well if you haven’t retired yet and are still trying to build up a fund.

 

[Sly Saint]

I think I must have been coming at this from the perspective it's probably much harder to convince officialdom you are unfit for work, and thereby entitled to benefits, if your condition is labelled as psychiatric, especially if medical 'wisdom' suggests if you just tried harder you would get fit enough to return to work again.

For anyone who has not seen the form that you have to fill out for ESA you can see it here:
https://assets.publishing.service.g.../esa-50-capability-for-work-questionnaire.pdf

They split the main questions into two groups (physical and mental). The 'mental' section includes cognitive problems.

If anyone just answered all questions at face value (ie without finding out about all the ins and outs of what the reviewer is looking for) you can see how 'easy' it is to 'pass' with flying colours.

I once 'tried it out' on someone in their nineties who had suffered a couple of strokes, had had cancer, plus numerous other ailments and, based on her score, she would have been deemed 'fit for work'.

(sorry, I think this has gone rather off topic)

 

[Dolphin]

There is also financial hardship/harm, including (in the UK at least) financial harm that can have far reaching implications when someone retires. There are some sickness benefits which count as credits towards your state pension when you retire, in lieu of the national insurance contributions that you would otherwise have paid if working. But I'm pretty sure people with mental illnesses do not get that kind of benefit, so do not accrue state pension benefits. So people with a physical illness, incorrectly diagnosed as a mental condition, will be denied a chunk of their state pension in due course, which they should in reality be entitled to. No doubt a strong motivation for the DWP, including the MUS moves.

Yes, in my country on means-tested sickness and illness payments you don’t get any credits towards a pension. I’m not convinced the MUS moves are connected to the DWP though I could definitely see a private disability insurance company wanting to reduce their liabilities in whatever way they can.

 

[Barry]

Maybe you were thinking of many ill health policies that won't pay out long term if you have a psychological illness. This is precisely the ones that Wezzles and Co were/are advising insurance industries about.

But I think also that if you have a hard time proving you cannot work, then as @Dolphin says, it can be very hard to get the right type of benefits.

ETA: I see @Sly Saint also touched on it.

 

[MEMarge]

Thanks @Andy, have been considering this for a while and looking into the various options.....

I am an accountant, though worked more with big PLC's not personal tax etc

 

[Graham]

Thanks for this @Andy, it may well be a useful route for me to take as I need an extra 5 or so years of contributions. The £3 or so a week sounds a great deal more reasonable than the thousands they have qouted me.

I did a couple of hours private maths tuition a week, and that was easily enough for me to pay the lower NI rate.

But, years spent bringing up children, or caring for someone also count: I'm not sure what the rules are now, but Kathy got her contributions for looking after her mother, then we chose to top them up.

Here in the UK we found the Nat Ins people very helpful.