Service Pension. Unearned Income?

#1
The old fella that runs our local Legion is having dramas with the local council.

Basically, he is 67 and on state pension, as well as his service pension. He asked for normal stuff, reduced rent, council tax, etc, and been told that his service pension is 'unearned income', so is not entitled.

Surely this is b******ks?

Anyone shed any light?
 
#2
According to HMRC rules, pension income is earned income. However there is nothing except the common-sense of the councillors :? stopping your local bunch of charlatans introducing completely different rules.

Generally speaking, in relation to an individual, earned income means

1. any Schedule E income, including pensions, superannuation, taxable Social Security benefits and income from any property which is attached to, or forms part of, the emoluments of any office or employment held by the individual; and

2. any income which is charged under Schedule A, B or D and is immediately derived by the individual from the carrying on, or exercise by them, of their trade, profession or vocation (either alone or as an active partner).
Hope, but unfortunately doubt, this will help. The precise definition is apparently in 'ICTA88/S833 (4)-(6)', whatever that is.
 

Sixty

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#4
The technical term is 'talking out of their hoop' since unearned income is generally held to be investment income (dividends from shares, distribution from bonds, income from property and so on).

As Idrach says though, it really is depending on the criteria the local government mongs are using.

Which council is it?
 
#5
Sixty said:
The technical term is 'talking out of their hoop' since unearned income is generally held to be investment income (dividends from shares, distribution from bonds, income from property and so on).

As Idrach says though, it really is depending on the criteria the local government mongs are using.

Which council is it?[/quote]

North Ayrshire Council, Sixty.
 
#6
This has been going on for lots and lots of years.

I can remember my dad getting worked up about exactly the same wording when it was applied to his Army pension.

I think the problem is that as the pension is a non-contributary one then it can be classed as unearned as you never paid any money into it.

Total tax robbing bollards but you can't get away from the cnuts.
 
#8
Forces pensions are usually described as non-contributory, but that is not the same as "unearned":

The Forces Pension Society said:
It is of note that Armed Forces Pension Schemes are usually considered to be non-contributory, but the salaries of all Service people are abated by an amount agreed by the Armed Forces Review Body to take into account the value of the pension. This is currently 7%, a not insignificant amount and is a de facto contribution.
 
#10
I went into this quite deeply when my turn came to get one. Seems the easiest way is to regard the 22+ or whatever as qualifying you for a pension. The actual money paid as pension is deemed unearned. One does nothing at the time it is paid.
 
#11
sorry for being a mong, but what does that mean in terms of the orginal question?

Can he fight it, or is it a lost cause?
 

Sixty

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#12
Heid, if you're willing to leave it with me until the weekend I'll make some calls.

I'm kind of hampered by being TA, meaning that I don't know the ins and outs of the Army pension but I do work in Pensions (albeit in fund management) and can speak to some experts for you.
 
#15
OldRedCap said:
heidtheba said:
sorry for being a mong, but what does that mean in terms of the orginal question?

Can he fight it, or is it a lost cause?
My case - lost cause
But was that at the end of your 22+, or post 65 as Heed's acquaintance is? Whether you are of pensionable age does make a difference in many cases, to your entitlement to benefits (but not to your tax treatment by HMRC). There are exceptions (disability pensions etc) but I can see how a council would categorise a 50 year old on what may very well be close to the national average income just from their MOD pension differently to the same person at 65 (on a higher pension 'cause the index linking has kicked in.)
 
#16
Article 119 of the Treaty of Rome; Pensions are deferred pay. He will be in receipt of a P60 each year from the AFPS; get him to produce this to the numpties concerned and ask why Income Tax ( a bit of a clue ) is being deducted...

The Council are talking from a bodily orifice not normally associated with conversation.

Guess what Industry I work in...
 
#18
Bravo_Bravo said:
Article 119 of the Treaty of Rome; Pensions are deferred pay. He will be in receipt of a P60 each year from the AFPS; get him to produce this to the numpties concerned and ask why Income Tax ( a bit of a clue ) is being deducted...

The Council are talking from a bodily orifice not normally associated with conversation.

Guess what Industry I work in...
The sex trade.

Do I win anything?
 
#19
Yes, extras.

AIUI being an EU Treaty it does not need to be tested. There has been UK case law that impacts on this; theColoroll case a couple of years ago was a case that had different retirement ages for men and woman - 65 and 60. This was deemed to be indirect sexual discrimination ( bear with me ) as, if you bear in mind pensions are deferred pay, an earlier reirement age means that women have less time to accrue pension so get lower pay.

BB
 

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