Benefits in relation to financial settlement

Hi, can anyone help me? I would really appreciate some advice.

I am 62, in receipt of a company pension, which is my sole income. I will not be entitled to a state pension at 65, as my pension was levelled when I retired 5 years ago.

My wife, who is 58, is in receipt of state benefits, which are her sole income. She will receive a state pension in 4/5 years time. She does not have a private pension. Our net monthly incomes are very similar.

I would be very grateful if anyone could clarify whether my wife''s benefits are classed as income in a divorce settlement? Also, will my company pension be classed as income, as it is already in payment, as opposed to it being an asset?

George sorry I cannot answer your query but bumping this up in the hope someone more knowledgeable can.
Best wishes.

George, your pension in payment will be counted as income as will her benefits. It is still possible that you will have to share the pension but that would depend on your respective incomes in retirement.
Any assets you have ie property will also be shared according to need. Have a look at s25 of the 1973 matrimonial causes act.

Hadenoughnow

Thank you very much for your response. It gives me great peace of mind to learn that State Benefits are counted as income and will thereby be included, when fairly equalising our future incomes, within the Consent Order.

However, to assist me further can you or anyone else tell me where this is written in legislation.

The problem with finances on divorce is thY a lot is down to either what you agree or what a judge decides is fair.

If your pension income was more than enough to live on comfortably then the chances are you would have to share some of it and this would reduce her dependence on benefits. It would not be appropriate for the state (us) to be supporting her if you have the means to do so between you. However if your pension income is no more than you would get from the state - including income and age related benefits - then splitting it would not benefit anyone.

A lot will depend on the numbers here.

Hadenoughnow

Thank you,once again, for your sound advice.

Any other responses would also be greatly appreciated.

Well, I have a bit of a bee in my bonnet about this.

In many cases it is definitely advisable for divorcing spouses to have a full benefits check.

For a start, you should be aware that benefits cannot normally be backdated. So you have little to lose by delaying.

The point is, very often, that when a man and a woman live together in a relationship, they are normally classed for benefits purposes as a couple. That means that their incomes are aggregated, lumped together in determining their entitlement to benefit.

But when a couple separate they become separate individuals, and your (ex)wife''s entitlement to benefits is calculated on her income alone, which could possibly mean that she could be entitled to more than she is getting at the moment. You have every incentive to make sure that she gets all she''s entitled to - if for no other reason than that it could help in reducing your liability to pay her maintenance.

I am not expert on pensions and and am in no position to advise you. But when it comes to benefits, I know rather more.

You need to be aware that any money which she might get from you will, almost certainly, be knocked off her benefits. So for example, if you split your pension, it is possible that the effect could be that your own income is reduced but anything you give her is deducted from her benefits so that the only beneficiary is the Chancellor. I don''t know whether this could apply to you, but for obvious reasons you need to watch it.

And experience tells me that many people do not realise what they are could be entitled to and for this reason do not claim. Have you heard of pension credit for example ?

Look, George, I don''t do CAB any more. I am, as they say, past it. Rules change very quickly.

But in your case I''d both follow Hamlet''s advice and get thee - not to a nunnery, but to a CAB and get a benefit check. It''s free so neither of you have much to lose.

Be aware :

The Court will not reduce your income below what you would be getting on benefits. So you need to know just what you would get, for that precise reason.

And don''t try to get lawyers involved in this, if either of you can help it. The way forward, I think, is for both of you to get benefits advice to work out how you can maximise your income. Almost certainly, you don''t have the dosh for a fight in Court.

LMM