PAYE: Pensions and Social Security Benefits

(asked on 3rd March 2021) - View Source

Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what his policy is on bringing state pension and benefits within PAYE.


Answered by
Jesse Norman Portrait
Jesse Norman
This question was answered on 12th March 2021

The State Pension and other benefits are paid directly to the recipient by DWP and HMRC. The Government has no plans to change this.

The tax treatment of social security benefits is based on the type of payment and the reason why it is provided. In general, benefits that are designed to replace income are taxable, including the State Pension, and benefits that meet specific costs are not taxable.

It is also important to note that the personal allowance – the amount of income that each individual may receive before paying income tax – is currently set at a level high enough to ensure that those pensioners whose sole income is the new State Pension or basic State Pension do not pay any income tax.

Reticulating Splines