PAYE76085 - PAYE operation: pensioners: P161

The action to take depends on the information given on the form P161.

Remember the following important points

• The P161 must be signed by the individual where a claim is being made for age-related allowances. If you receive an unsigned P161 and the information provided affects age-related allowances you should return it to the individual for signing

• The payer of an occupational pension will be operating a week 1 / month 1 basis emergency tax code, so consider whether previous pay and tax details need to be included
• If you are coding state pension for the first time, the P161 must be logged in the Targeted Review Form, Bulk Logging screen upon receipt. The P161 should not be processed until the week in which the state pension commences, along with the P46(DWP), if available
• Age-related allowances are not due in CY when the P161 has not been received, unless full details of the individual’s income are already known

• Any post giving information that affects age-related allowances should be treated as a P161
• When a P161 is logged as received the system will calculate the age-related allowances due, using the income details entered in the income, allowances, benefits and deductions pages
• The capture of the P161 in IABD will update the targeted review form status screen
• Where you are notified within the first year of state pension commencing of a change to the state pension details held in IABD you should follow the guidance at PAYE130067 

Prompt and correct action means that any underpayment should be limited to the period from the date of retirement to the date the new code is first used. This avoids complaints and possible hardship.

Note: Unless you have already done so, do not give age-related allowances until you have either

• Received a completed form P161

• Been given the necessary information to be able to calculate the age-related allowances