Bereaved civil service families could face ‘unjust’ tax bills due to pension scheme delays
Source: The Guardian ·
MPs say ‘chaos’ at Capita-run scheme could mean some claims miss tax-free time limit on lump sum paymentsBereaved families could face “unconscionable” tax bills because of “chaos” in the civil service pension scheme, the government has been warned.Some lump sum pension payments to families are only tax-free if made within two years of a scheme being told of the member’s death. Continue reading...
From the source
Bereaved families could face “unconscionable” tax bills because of “chaos” in the civil service pension scheme, the government has been warned. Some lump sum pension payments to families are only tax-free if made within two years of a scheme being told of the member’s death. MPs are now voicing fears that severe delays in the administration of the civil service pension scheme, which is run by the outsourcing company Capita, could push some families over that threshold. They would then be hit with a tax bill calculated at the recipient’s personal rate. The families of more than 1,600 deceased civil servants have been waiting for more than 100 days for their “death in benefit” claim to be processed, according to the latest figures. Some of those have reported struggling to pay bills because of the delay. The Conservative MP Geoffrey Clifton-Brown, who chairs the Commons public accounts committee (PAC), said: “The chaos currently engulfing the civil service pensions scheme means that…