DWP Pension inheritance rules – what happens to payments when someone dies | Personal Finance | Finance

The State Pension, providing a regular income for nearly 12.7 million elderly individuals across Great Britain, including over one million in Scotland, is managed by the Department for Work and Pensions (DWP). It’s available to those who have reached the UK Government’s eligible retirement age of 66 for both genders and have made at least 10 years’ worth of National Insurance contributions.

Currently, about 3.4 million people are claiming the New State Pension, receiving up to £221.20 each week, which equates to £884.80 per four-week pay period. The majority of claimants, around 9.3 million, are receiving Basic State Pension payments of up to £169.50 each week, or £648 per pay period.

The type of State Pension one receives is determined by their date of birth – men born before April 6, 1951 and women born before April 6, 1953 are eligible for the Basic State Pension, while those born after these dates will receive the New State Pension.

However, what happens to State Pension payments when someone passes away?

It’s a challenging subject and not one anyone would willingly contemplate, but understanding what will occur could assist you or a family member, reports the Daily Record.

DWP State Pension payments after claimant dies

A claim for State Pension doesn’t automatically cease upon death; action is required. The Pension Service must be notified to halt payments, achievable by calling their helpline at 0800 731 0469.

Eligibility for additional funds from a deceased partner’s State Pension hinges on their National Insurance record and when they reached pensionable age.

Those yet to reach State Pension age may qualify for Bereavement benefits.

Inheritance and the Basic State Pension

In terms of inheritance, if a spouse or civil partner was of State Pension age before April 6, 2016, GOV.UK advises contacting the Pension Service post-death to ascertain potential claims.

An increase in Basic State Pension could be possible through the deceased’s qualifying years if the survivor isn’t already receiving the full amount.

For those reaching State Pension age on or after April 6, 2016, or who are below that age when their partner passes away, the “Your partner’s National Insurance record and your State Pension” online tool can help determine what inheritance might be due.

Single individuals, divorcees, or those with dissolved civil partnerships might find their estate eligible to claim part of a Basic State Pension.

If an individual passes away after reaching State Pension age, and the State Pension has not been claimed, the estate can claim up to three months of the Basic State Pension.

Deferring State Pension – what you need to know

Deferring State Pension payments can lead to increased payments when they are eventually claimed, by around £600 each year, for those who choose to continue working after reaching State Pension age.

State Pension top-up

According to GOV.UK guidance, if a person has topped up their State Pension, their spouse or civil partner may be able to inherit some or all of the top-up.

Ineritance and New State Pension

A person may be able to inherit an additional payment on top of their new State Pension if they are widowed. However, no inheritance is possible if they remarry or form a new civil partnership before reaching State Pension age.

Inheriting an additional State Pension or protected payment

If a marriage or civil partnership began before April 6, 2016, and certain circumstances apply, a person may inherit part of their deceased partner’s Additional State Pension.

Half of a partner’s protected payment can be inherited if the marriage or civil partnership with them began before April 6, 2016, and the individual’s State Pension age is on or after April 6, 2016, or they died on or after April 6, 2016. This payment will be made with the State Pension.

If you’re set to inherit your partner’s additional State Pension or lump sum, there are a few conditions:

Your partner passed away while they were deferring their State Pension or had begun claiming it after deferral.

They reached the State pension age before April 6, 2016.

You were married or in a civil partnership at the time of their death.

To calculate how much money you will receive, check your State Pension on the GOV.UK website here.

Source link