RPSM09108020 - Technical Pages: Member benefits: Payments covered by Regulations: Pensions continuing to be paid after death
[Reg 15 of the Registered Pension Schemes (Authorised Payments) Regulations 2009 - SI 2009/1171]
Apart from the case of pensions continuing under a ‘term certain’ guarantee (RPSM10104050), pensions are supposed to stop on death of the pensioner. Regulation 15 is intended to enable certain payments of pension made in reasonable ignorance of a pensioner’s death, to stand undisturbed by the unauthorised payment charges that would otherwise apply. It can apply to payments of both a member’s pension, as well as to payments of a dependant’s pension.
The effect is that over-paid pension instalments which meet the conditions below, can be accepted as authorised member payments and be taxed as pension income of the recipient in the tax year in which they are actually paid over. This treatment may apply to one or more pension instalments, paid in any pattern or combination within the circumstances explained below. Instalments falling after the end of the time period below are not authorised by this regulation, but the fact that an unauthorised pension instalment might be paid after the end of the time period below, will not prevent earlier payments made within the acceptable circumstances from qualifying under this regulation.
In order to qualify as an authorised payment under this regulation, each such payment must:
- be intended to represent a form of authorised pension (either member’s pension - see RPSM09100310, or dependant’s pension - see RPSM10100060), and
- be paid no later than 6 months after the pensioner’s death (instalments paid after this time will be unauthorised payments), and
- be a payment which would have been an authorised payment had the recipient been alive on the date it was made, and
- the payer did not know of the death before the payment was made, and couldn’t reasonably have been expected to have known, or
- where the payer did know of the death before the payment was made, the payer took all reasonable steps to prevent the payment either being made or being made in that amount