Household income and whether pension contributions are included

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Stephen Flavell
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#1
Report Thread starter 4 years ago
#1
Hi,
student finance have queried my pensions contribution declaration in my parents' income assessment.

My understanding, when reading the form, was that pension contributions would not be included in the household income. I am PAYE and my pension contributions are from my salary into a money purchase scheme. However student finance's response was "We can't accept this as evidence of your private pension contributions in the 2015/16 tax year. Your evidence shows that these pension contributions were made through your employer. You have already received tax relief on these so we can't deduct them from your household income."

Having read through the documentation it is not clear if pension contributions should be included in the household income or not and if so, what constitutes a pension contribution which is or isn't including in household income.

Can anyone explain please.
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Stuart SFE
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#2
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#2
(Original post by Stephen Flavell)
Hi,
student finance have queried my pensions contribution declaration in my parents' income assessment.

My understanding, when reading the form, was that pension contributions would not be included in the household income. I am PAYE and my pension contributions are from my salary into a money purchase scheme. However student finance's response was "We can't accept this as evidence of your private pension contributions in the 2015/16 tax year. Your evidence shows that these pension contributions were made through your employer. You have already received tax relief on these so we can't deduct them from your household income."

Having read through the documentation it is not clear if pension contributions should be included in the household income or not and if so, what constitutes a pension contribution which is or isn't including in household income.

Can anyone explain please.
Hi Stephen,

The majority of employee schemes have the tax relief and deduction from the gross income calculated by the employer at source. This is often reflected in the payslips which will show a difference between Gross/Pensionable pay and Taxable pay.

Taxable pay is usually lower and this is the figure that we would use in the financial assessment.

In this scenario, the deduction has already been made. We can't deduct the same figure twice.

For a Private or Personal pension where you pay regular payments to the pension provider which don't reflect in your payslip we can take these into account as an income deduction for assessment of household income.

We will require evidence of payments made, which can be in the form of a Tax Return or a statement from your pension provider.

In this scenario, once the evidence of payments made is received we would deduct the figure from the household income.

Regards,

Stuart
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Tom81
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#3
Report 4 years ago
#3
As a (step)parent of a young person applying for student finance, can I point out that this can be very, very, misleading- many employers will have a figure on the P60 which does not take account of deductions taken for company pension- the deduction has not been made from the figure given as "gross income".
I'm sure many parents and young people will be entering this "gross" figure as their income, not realizing that they need to go back through their payslips and take off the pension contributions that have come out of their salary each month.
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camporojo
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#4
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Now I'm confused. SFE in this thread claim to use taxable pay i.e. the lower figure in the financial assessment, but the form asks you to submit gross figures.
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Graeme SFE
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#5
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#5
Hi,

We almost always ask for the gross figure. However, if private pension contributions are involved, we can accept the net figure.

Warm regards,
Graeme
(Original post by camporojo)
Now I'm confused. SFE in this thread claim to use taxable pay i.e. the lower figure in the financial assessment, but the form asks you to submit gross figures.
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SimonJBrown
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#6
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#6
Also confused as parent on this. I pay into work pension scheme, work pay an amount and I contribute a percentage each month.My payslip shows Gross pay and Taxable pay as the same amount.The break down in the earnings on a payslip shows my pension contribution as a minus.Do I need to add up the pension payments I have made for year and place in the
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SFE Isaac
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#7
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#7
(Original post by SimonJBrown)
Also confused as parent on this. I pay into work pension scheme, work pay an amount and I contribute a percentage each month.My payslip shows Gross pay and Taxable pay as the same amount.The break down in the earnings on a payslip shows my pension contribution as a minus.Do I need to add up the pension payments I have made for year and place in the
Hi, we need any salary to be input into the salary/wage box and the work pension should go in the occupational pension box, we don't take into account any minus figures. If you are unsure what to input then you should input it to the best of your ability and if there are any discrepancies when we review it with the tax office then you may be asked to provide evidence.
Thanks, Isaac
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Burgmeister
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#8
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#8
I have been trying to work this out for a couple of days now and, although I don't think I'm stupid, I really can't get my head around whether we take off pension contributions in our applications or not.In our case, I have a workplace pension scheme whereby I pay 5% of my salary in to a pension scheme. The company pays their bit (4% I believe) and the government adds some tax back when it gets in to the pension. These contributions are not reflected on my P60. Do I state the part I pay as a pension contribution on the application form?Secondly, we pay money in to a personal pension for my wife. Again, we pay a sum in and the Government adds the tax contribution once her money gets in to Fidelity (the pension company). Again though, this does not show on her P60. Do we state this on the form as a pension contribution too?Like I said, I didn't think that I was stupid but this application is making me doubt myself!
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