PAYE76030 - PAYE operation: pensioners: DWP uprating service of state pensions
The Department for Work and Pensions (DWP) Uprating Service provides a magnetic tape which is run against the database and enables state pensions / benefits deductions to be automatically revised at Annual Coding.
It is, therefore, important to bring individuals into the Uprating Service when you
- Examine SA returns and state pension / benefits are included in a PAYE source of income
- Deal with forms P161 and P46(DWP)or other information telling you about new pensions and benefits
The DWP Uprating Service tells offices of
- New awards of certain state retirement pensions and bereavement benefits, using form P46(DWP)
And
- The annual uprated pension awards for all pensioners included in the service
Amount by which record updated
State pensions are normally increased from the first Monday in the tax year. The DWP make payments of state pensions on fixed paydays, state pension payday is Monday except for widow beneficiaries who are paid on a Tuesday. Where the 6 April does not fall on a Monday then most pensioners will only receive the new rate of state pension for 51 weeks, the Uprating Service will use the calculations below to calculate the annual amount to be included in the code.
The Uprating Service calculates the coding deduction at 1 week at the old rate and 51 weeks at the new rate in years when 6 April falls on a Tuesday, Wednesday, Thursday or Friday.
In years when 6 April falls on a Saturday, Sunday or Monday, the Uprating Service calculates the coding deduction at 52 times the new rate.
The Uprating Service provides a weekly snapshot of an individual’s state pension for the current year. The state pension / benefits uprating process in January then converts this to an annual amount and applies the annual percentage increase to arrive at a figure for CY+1. You should be aware that there may be some instances where the amounts notified by the DWP are not representative of the true annual figure. Where a pensioner notifies you of a different figure, code the amounts advised by the pensioner.
Annual Coding
If Annual Coding has not yet taken place, but ‘NIB / IB Uprating’ is recorded in Contact History, you should not amend the benefit figure held in CY+1 IABD.
If, exceptionally, following the DWP uprate but prior to Annual Coding, you receive correspondence to advise the rate of benefit has changed, for example where the rate of pension has increased following bereavement, you should calculate the CY+1 figure required using CY details, which will be uplifted at Annual Coding Final.
New state pension payment rules
From 6 April 2010 anyone reaching state pension age will have their payday (Monday to Friday) allocated based upon the final two numbers of their National Insurance number. Under the new rules there will be no increase in benefit during the first week in April and as a result, the uprating service will always calculate the coding deduction based on one week at the old rate and fifty one weeks at the new rate.
State pensions will also be able to be paid fortnightly and this will be reflected in the IABD screens from October 2010.
Note: For details of how NPS calculates the actual amount of state pension in the first year, and details of the ‘State Pension Age’ automated scan, see PAYE76086.
