Fees And Occasional Work

If you are paid each week as an employee, the earnings rule calculation is straightforward.

But if you work occasionally, there are special rules about how your earnings are counted. See HM Rev & Customs page http://www.hmrc.gov.uk/working/intro/casual.htm.

If you simply work occasionally or irregularly as an employee or on a 'casual' basis, your earnings are counted for the period to which they relate.

For example if you do one week's work and get one week's pay of £160, that would wipe out one week's pension. In either case, your earnings are net earnings after deducting tax and National Insurance and any expenses of working including travel, 19 p towards a meal, and anything else which is reasonable and incurred because of the work.

However, there are special rules for people over retirement age (and their dependants) who are self employed. It is generally a great advantage to be counted as self employed.

If you are self employed, you do not take off the various expenses listed earlier.

Instead you are assessed on your taxable profit as set out in your tax return. That profit is averaged out over the year. That means that you can have an annual taxable profit of £6,900 before the earnings rule begins to affect you, even if you receive fees in any one week which are considerably more than £79.

The DWP will assess your pension on the expected profit for the year and reduce your pension accordingly.

You will be expected to submit your tax accounts to them once the Inland Revenue have approved them. If the expected figure turns out to be wrong, they will then adjust your current pension accordingly.


New for 2015 - The Rent A Room Scheme - Lodgers

or Earnings Rules For Dependants

The Rent A Room Scheme - Lodgers

/retirement/pensions/income/the-rent-a-room-scheme-lodgers.php... see: The Rent A Room Scheme - Lodgers