PSI24.1.8 - Pension Credit Benefits – Form of Benefits – payment dates

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

[PN6A.2-3]

Except in limited circumstances, benefits from pension credit rights cannot be paid to an ex- spouse member before age 50. The requirement applies even if the employee benefit rights from which the pension credit rights derived had a low normal retirement, for example age 35. The pension credit benefits can be paid at any time from age 50 but they must be in payment by age 75 at the latest.

The limited circumstances where benefits from pension credit rights can be paid before the ex- spouse member reaches age 50 are where the

• ex-spouse member is in exceptional circumstances of serious ill health (see PSI24.1.5), or
• ex-spouse member also has benefit rights in the same scheme as a result of service as an employee which are being paid on grounds of incapacity (see PSI10.2.2) – the pension credit benefits can be paid at the same time as the employee membership benefits, or
• ex-spouse member dies – benefits can be paid to the widow, widower and/or dependants of the deceased ex-spouse member, or
• scheme is winding up and the pension credit benefit, together with any employee benefit rights in relation to the scheme, are trivial in amount (see PSI24.1.5).

The benefits relating to the pension credit can be paid independently of the conditions relating to the payment of benefits relating to an employee membership of the same scheme. However, whilst the pension credit benefit can be paid at a different time to an employee benefit, the pension credit would still need to be taken into account for the Revenue limit that applies to the employee membership where the pension credit is not treated as provided separately from the employee membership benefits (see PSI24.1.7).

A lump sum benefit paid to the ex-spouse member from the pension credit rights must be paid when the ex-spouse’s pension from the pension credit right first comes into payment.

A pension from pension credit rights for the widow, widower or dependants of an ex-spouse member can be commuted on triviality grounds (see PSI24.1.5) at the same time that the ex- spouse’s own pension from the same pension credit rights is also commuted for triviality.

Social Security legislation contained in the Welfare Reform and Pensions Act 1999 and related regulations may put further conditions on when benefits can or must be paid to an ex-spouse member or his or her beneficiaries (see PSI24.1.9).