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Welfare Reform and Pensions Act 1999

Application for a court order (new section 342A)

Where an individual has been made bankrupt and the trustee in bankruptcy has reason to believe that excessive contributions have been made to a protected pension, he can apply to the court for an order to recover the excessive contributions (subsection (1)).

The test the court has to consider is whether the making of contributions has unfairly prejudiced creditors (subsection (2)). Contributions that have unfairly prejudiced creditors are termed “excessive contributions”. Subsection (6) provides that the court must consider two matters in particular when considering whether contributions are excessive:

  • whether the making of any of the contributions was for the purpose of putting assets beyond the reach of creditors;

  • whether the total amount of contributions was excessive in the light of the bankrupt’s circumstances when the contributions were made.

If the court is satisfied that excessive contributions have been made, subsection (2) provides that the court may make an order to restore the position to what it would have been if the excessive contributions had not been made.

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