Pension Credit, pension-age HB and pensioner CTR count no income from trusts or life interests #2871

In Pension Credit, pension-age Housing Benefit and the pensioner Council Tax Reduction schemes, DWP and councils disregard any actual income from capital, except income from the capital that each capital Schedule lists in Part 2:

• the right to receive income under a life interest or from a liferent;
• the right to receive rent, where the claimant has no reversionary interest in the property;
• the right to receive income under an annuity;
• property in a trust whose trustees must or may make payments to or for the claimant or partner, except a charitable trust and one other kind.

In Housing Benefit and Council Tax Reduction, councils disregard that income too while such capital totals £10,000 or less, and count it once the capital totals more. Schedule IV of the Pension Credit regulations has no such disregard.

DWP and councils disregard the interest on an ordinary bank deposit and the dividends on shares the claimant owns outright, and the model leaves savings interest and dividends out of all three means tests. It also leaves out other_investment_income, whose documentation includes interest from trusts or settlements. The model has no input that marks capital as Part 2 capital or holds the income it yields. So where DWP or a council counts income from Part 2 capital, the model counts none of it.

Four places on main state the general disregard without its exception:

• the documentation of council_tax_reduction_applicable_income: "The pensioner schemes disregard any actual income from capital";
• the documentation of housing_benefit_applicable_income, which says Schedule 5 paragraph 22 of the pension-age regulations "disregards any actual income from capital";
• the comment in that file's INCOME_COMPONENTS list, which cites the same paragraph;
• the Pension Credit income list (gov.dwp.pension_credit.guarantee_credit.income), whose reference to Schedule IV paragraph 18 reads "actual income from capital disregarded".

#2834 states the exception in the Council Tax Reduction text, and its formula still counts none of that income.

A fix could add a person-level input for income from Part 2 capital and one for that capital's value, then count the income under each means test's rule. DWP and councils deem no income from Part 2 capital, so the model should leave that value out of the income it deems from capital.

#2748 covers how the model taxes trust income in other_investment_income, and #1961 covers how its Universal Credit counts trust income.