PART 8

Payment of benefits
CHAPTER 1

Application for payment of benefits

Benefits payable by the Department
161
1
Benefits under these Regulations are payable by the Department.
2
Benefits are not payable to or in respect of a member unless the provisions of this Chapter are complied with.

Application for payment of benefits
162
1
A person (P) must apply in writing to the Department for payment of benefits.
2
An application may include a request that a pension be paid monthly or quarterly.
3
P must satisfy a written request from the Department to provide any information specified in the request.
4
The information must be information—
a
in P's possession; or
b
which P can reasonably be expected to obtain.
CHAPTER 2

Payment of pensions

Interpretation
163
In this Chapter—
- “cessation date” means the last day on which the pension is payable;
- “initial payment date”—
  1. for monthly payment of pension, means the first payment date which follows the payable date or, if the payable date falls on the payment date, the payable date;
  2. for quarterly payment of pension, means the third payment date which follows the payable date or, if the payable date falls on the payment date, the second payment date which follows the payable date;
- “payable date” means the date on which the pension becomes payable;
- “payment date”—
  1. for a survivor's pension, is the 28th day of the month; and
  2. for a retirement pension, is the day before the day of the month on which the person to whom the pension is payable was born; and
    1. where the person was born on the 1st day, it is the last day of the month;
    2. where the person was born on the 30th day, for any month in which there is no 29th day it is the 28th of the month; and
    3. where the person was born on the 31st day, for any month in which there is no 30th day it is the last day of the month; and
- “pension” includes an annuity.

Monthly payment of pension
164
1
A pension is to be paid in accordance with this regulation unless P's application for payment of benefits included a request that the pension be paid quarterly.
2
The initial payment of the pension is to be made on the initial payment date.
3
The amount of the initial payment is—
(D I)/(D M) × (A R)/12
where— AR is the annual rate of pension; DI is the number of days in the period beginning on the payable date and ending on the initial payment date and is 1 where the payable date falls on the initial payment date, and DM is the number of days in the period beginning on the day which falls one month before the day after the initial payment date and ending on the initial payment date.
4
The amount to be paid on the payment date in each subsequent month until the cessation date is—
(A R)/12
where AR is the annual rate of the pension.
5
If the cessation date does not fall on the payment date, the final payment is to be made on, or as soon as possible after, the cessation date.
6
The amount of the final payment is—
(D F)/(D M) × (A R)/12
where— AR is the annual rate of the pension; DF is the number of days in the period beginning on the day immediately following the last payment date before the cessation date and ending on the cessation date, and DM is the number of days in the period beginning on the day immediately following the last payment date before the cessation date and ending on what would have been the next payment date if the pension had not ceased to be payable.

Quarterly payment of pension
165
1
A pension is to be paid to person (P) in accordance with this regulation if P's application for payment of benefits included a request that the pension be paid quarterly.
2
The initial payment is to be made on the initial payment date.
3
The amount of the initial payment is—
(D I)/(D Q) × (A R)/4
where— AR is the annual rate of the pension. DI is the number of days in the period beginning on the payable date and ending on the initial payment date, and DQ is the number of days in the period beginning on the day which falls 3 months before the day after the initial payment date and ending on the initial payment date.
4
The amount to be paid on the payment date in every third month after the month in which the initial payment date falls is—
(A R)/4
where AR is the annual rate of the pension.
5
If the cessation date does not fall on a payment date under paragraph (4), the final payment is to be made on, or as soon as possible after, the cessation date.
6
The amount of the final payment is—
(D F)/(D Q) × (A R)/4
where— AR is the annual rate of the pension; DF is the number of days in the period beginning on the day immediately following the last payment date under paragraph (4) and ending on the cessation date, and DQ is the number of days in the period beginning on the day immediately following the last payment date under paragraph (4) and ending on what would have been the next such payment date if the pension had not ceased to be payable.

Apportionment Act 1870 not to apply
166
The Apportionment Act 1870 being inconsistent with regulations 164 (monthly payment of pension) and 165 (quarterly payment of pension) does not apply to benefits under these Regulations.
CHAPTER 3

Payment of lump sums

Member declaration
167
1
The Department may not pay a member a lump sum under this Chapter unless the member declares in writing that, on payment of the lump sum, paragraph 3A of Schedule 29 to the Finance Act 2004 Act would not apply.
2
The declaration must be—
a
signed by the member;
b
in a form specified by the Department; and
c
provided by a date determined by the Department.

Commutation of part of pension
168
1
The following members may apply to the Department to receive a lump sum in place of part of a pension—
a
a member who is entitled to payment of a retirement pension;
b
a pension credit member who is entitled to payment of a pension credit retirement pension.
2
Paragraph (1)(b) only applies if—
a
the member's pension credit is derived from rights attributable to the pensionable service of a pension debit member; and
b
a retirement pension does not become payable to the pension debit member before the day on which a pension-sharing order takes effect in respect of that pensionable service.
3
An application under this regulation must—
a
be in writing;
b
be made when the member applies under regulation 162 for payment of the pension; and
c
specify—
i
the amount of the lump sum which the member wishes to receive; or
ii
the commutation amount.

Amount of lump sum payable under regulation 168
169
The amount of a lump sum payable to person (P) under regulation 168 must—
a
be a multiple of £12; and
b
not exceed P's permitted maximum.

Commutation amount
170
1
Paragraph (2) applies for the purpose of calculating the annual rate of pension payable to a member (P) who receives a lump sum under regulation 168.
2
The commutation amount is—
1/12 × a m o u n t o f t h a t l u m p s u m
3
If a retirement pension commuted under regulation 168 ceases to be payable under regulation 97 or 114, the commutation amount for any retirement pension that subsequently becomes payable to P is an amount determined by the Department after consulting the scheme actuary.

Commutation of whole pension (serious ill-health)
171
1
This regulation applies to a member (P) who, on the entitlement day for a pension, has a life expectancy of less than a year.
2
P may apply to the Department to receive a lump sum instead of the pension.
3
The application must—
a
be in writing,
b
be made when P applies under regulation 162 for payment of the pension, and
c
be accompanied by all the medical evidence necessary for the Department to determine that P is entitled to payment of the lump sum.
4
If P is eligible to apply under regulation 168 to receive a lump sum under that regulation—
a
the largest permissible lump sum is to be paid under that regulation; and
b
the commutation amount under that regulation is to be deducted when calculating the annual rate under regulation 172(2)(a).
5
In this regulation, “pension” means—
a
an age retirement pension and any phased retirement pension payable with it;
b
an ill-health pension and a total incapacity pension or phased retirement pension payable with it; or
c
a pension credit retirement pension.

Amount of lump sum payable under regulation 171 instead of retirement pension
172
1
This regulation applies to a member (P) who applies under regulation 171 to receive a lump sum instead of a retirement pension.
2
The amount of the lump sum payable to P is the total of—
a
for an age retirement pension, ill-health pension or total incapacity pension, a sum equal to 5 x the annual rate of the retirement pension, and
b
for a phased retirement pension that is already in payment, a sum equal to (A-B) x the annual rate of the phased retirement pension where—
A is 5, and
B is the period (in years and fractions of a year) from the date on which the phased retirement pension was first paid until the date of the application .

Amount of lump sum payable under regulation 171 instead of a pension credit retirement pension
173
1
This regulation applies to a member (P) who applies under regulation 171 to receive a lump sum instead of a pension credit retirement pension.
2
The amount of the lump sum payable to P is an amount equal to 5 times the annual rate of the pension credit retirement pension.

Commutation: small pensions
174
1
If paragraph (2) applies, the Department may, on the application of a member (P), commute a retirement pension by paying a lump sum to P.
2
This paragraph applies if —
a
the lump sum is a trivial commutation lump sum as defined in paragraph 7 of Schedule 29 to the Finance Act 2004 Act or falls within regulation 11 or 12 of the Registered Pension Schemes (Authorised Payments) Regulations 2009 ;
b
the application under paragraph (1) is made when P applies under regulation 162 for payment of the retirement pension;
c
in the 3 years ending with the date of the application, a transfer payment has not been made in respect of P;
d
in the 5 years ending with the date of the application, a transfer payment has not been accepted in respect of rights accrued under another occupational pension scheme; and
e
a transfer payment otherwise than from another occupational pension scheme has not been accepted in relation to P.
3
If a lump sum is paid under paragraph (1), benefits are not payable under Part 6 on P's death.
4
The Department may, on the application of a pension credit member (P), commute a pension credit retirement pension by paying a lump sum to P if—
a
the lump sum is a trivial commutation lump sum as defined in paragraph 7 of Schedule 29 to the Finance Act 2004 or falls within regulation 11 or 12 of the Registered Pension Schemes (Authorised Payments) Regulations 2009; and
b
the application is made when P applies under regulation 162 for payment of the pension.
5
The Department may, on the application of a beneficiary to whom a pension is payable under Part 6, commute that pension by paying a lump sum to the beneficiary if—
a
the application is made when the beneficiary applies under regulation 162 for payment of the pension; and
b
the lump sum is a trivial commutation lump sum death benefit as defined in paragraph 20 of Schedule 29 to the Finance Act 2004.
6
A lump sum payable under this regulation is to be determined by the Department after taking advice from the scheme actuary.
CHAPTER 4

Continuing entitlement to benefit

Evidence of continuing entitlement to benefit
175
1
Where a benefit is being paid to a person (P), the Department may at any time require that evidence be provided, by such date as it may specify, to establish—
a
the identity of P; and
b
P's continuing entitlement to the benefit.
2
If the evidence is not provided by the date specified, the Department may withhold the whole or any part of the benefit.
3
If a benefit ceases to be payable because P ceases to meet the incapacity condition or ceases to meet the total incapacity condition, the power in paragraph (1) may be exercised so as to require P to provide evidence that there has been no such cessation.

Cessation of benefits where no entitlement
176
1
This regulation applies if after paying a benefit the Department determines that there was no entitlement or there is no longer an entitlement to the benefit.
2
The Department may—
a
cease to pay the benefit;
b
withhold the whole or any part of the benefit; or
c
recover any payment made if there was no entitlement to the benefit.
CHAPTER 5

Miscellaneous

Recovery of overpayment of benefits
177
1
This regulation applies in respect of a financial year for which a decrease in prices is specified in the order made by the Department of Finance and Personnel.
2
The Department may recover any overpayment of benefits that occurs as a result of the application of the leaver index adjustment for that year.

Interest on late payment of benefits
178
1
This regulation applies to a benefit except—
a
a phased retirement pension or a lump sum payable under regulation 168 in place of part of that pension; or
b
a total incapacity pension payable between the date on which the person to whom it is paid first engages in any other form of work as mentioned in regulation 118(2)(c) and the date on which the Department is satisfied that the person continues to meet the total incapacity condition despite engaging in such work.
2
Except as provided in paragraphs (8) and (9), where a benefit to which this regulation applies is not paid within one month after the due date, the Department must pay interest on the amount unpaid at the Bank of England base rate compounded with 3-monthly rests from the due date to the date of payment.
3
Where the benefit is a death grant, the due date is the day after the date on which the Department became satisfied that payment may be made.
4
Where the benefit is a lump sum under regulation 168, 171 or 174 or a grant other than a death grant, the due date is the day on which the benefit is payable.
5
Where the benefit is a pension or annuity, the due date is—
a
in the case of a payment under regulation 164(2) or 165(2), the initial payment date (as defined in regulation 163);
b
in the case of a payment under regulation 164(5) or 165(5), the cessation date (as defined in regulation 163);
c
in any other case, the date on which payment is to be made under regulation 164(4) or 165(4).
6
In determining the due date in accordance with paragraphs (4) and (5), no account is to be taken of the requirement to make an application for the benefit under regulation 162.
7
In this regulation “Bank of England base rate” means—
a
the rate announced from time to time by the Monetary Policy Committee of the Bank of England as the official dealing rate, being the rate at which the Bank is willing to enter into transactions for providing short-term liquidity in the money markets, or
b
where an order under section 19 of the Bank of England Act 1998 is in force, any equivalent rate determined by the Treasury under that section.
8
Where a payment to the Department is received after the benefit to which it relates becomes payable, it may determine that this regulation does not apply to the benefit until the payment is received.
9
If paragraph (10) applies, the Department may determine that this regulation does not apply to any benefit, either in respect of the whole period or any part of the period referred to in paragraph (10)(a).
10
This paragraph applies if—
a
a benefit is payable between the date specified under regulation 175(1) and the date on which the evidence required under that regulation is received by the Department;
b
that evidence was not provided by the date specified but was provided later; and
c
it does not appear to the Department that the delay in providing the evidence was due to circumstances outside the control of the person to whom the benefit is payable.

Payment of benefits in certain cases
179
1
Where a person (P) to whom a benefit is payable has not reached 18 or is incapable by reason of infirmity of mind or body of managing P's affairs, the Department may—
a
pay the benefit to any person having the care of P, or
b
apply it as the Department thinks fit for the benefit of P or P's dependants.
2
Where on the death of a person (D) the total of any sums due to D and any sums payable to D's personal representatives under these Regulations does not exceed the amount specified in any order made under section 6 of the Administration of Estates (Small Payments) Act (Northern Ireland) 1967 which applies to D's death, the Department may, without requiring the production of probate or other proof of title, pay the amount due—
a
to D's personal representatives, or
b
to the person, or to or among any one or more of any persons, appearing to the Department to be beneficially entitled to D's estate.

Benefits not assignable
180
1
Where a benefit is payable to a person or a person has a right to a future benefit, the benefit or the right to the benefit must not be assigned in favour of the person's surviving spouse, surviving civil partner or dependant, and an agreement to this effect is void.
2
Article 89 of the 1995 Order (inalienability of occupational pensions) prevents assignment in other circumstances.

Forfeiture of benefits
181
1
The Department may, in relation to a benefit to which this regulation applies—
a
defer or suspend payment of a benefit for so long as it determines; or
b
reduce the amount or rate of the benefit by so much and for so long as it determines.
2
This regulation applies in relation to—
a
a benefit payable to a person convicted of an offence mentioned in paragraph (3) if the offence is committed before the benefit became payable;
b
a retirement pension or pension credit retirement pension payable to a person convicted of an offence mentioned in paragraph (4) (or a lump sum payable to that person in place of part of a pension) if the offence is committed before the benefit became payable;
c
a benefit payable to a person convicted of an offence mentioned in paragraph (5) if the person is the beneficiary of the deceased member.
3
The offence is—
a
an offence of treason, or
b
one offence or more under the Official Secrets Acts 1911 to 1989 , or under section 18 of, or listed in section 33(3)(a) of, the National Security Act 2023, for which the person has been sentenced on the same occasion to—
i
one term of imprisonment of at least 10 years; or
ii
2 or more consecutive terms of imprisonment which add up to at least 10 years,
4
The offence is—
a
committed in connection with service as a public servant; and
b
certified by the Secretary of State as—
i
gravely injurious to the interests of the State; or
ii
liable to lead to serious loss of confidence in the public service.
5
The offence is one of the following offences committed in relation to the death of a member (D)—
a
the murder of D;
b
the manslaughter of D;
c
any other offence of which the unlawful killing of D is an element.
6
The power in paragraph (1) may not be exercised in relation to the guaranteed minimum pension of a person unless—
a
the person is convicted of an offence mentioned in paragraph (3); or
b
in the case of a widow's, widower's or surviving civil partner's guaranteed minimum pension, the person by reference to whose employment the pension is payable is convicted of an offence mentioned in paragraph (3).

Reduction in benefits: annual allowance and lifetime allowance charge
182
1
This Regulation applies to the situations set out in paragraphs (2) and (3), in relation to a benefit payable under these regulations, and in paragraphs (4) and (5) “the charge” refers to either of the charges set out in paragraphs (2) and (3).
2
The lifetime allowance charge under section 214 of the Finance Act 2004 arises because a benefit becomes payable to a person and the person and the Department are jointly and severally liable to the charge.
3
The annual allowance charge under section 227 of the Finance Act 2004 arises in respect of a person who serves a notice under section 238A of that Act .
4
The Department must pay the charge.
5
The amount of the benefit must be reduced to reflect the amount of the charge in such manner as the Department is to determine, after taking advice from the scheme actuary.

General prohibition on unauthorised payments
183
Nothing in these Regulations requires or authorises the making of any payment which, if made, would be an unauthorised payment for the purpose of Part 4 of the Finance Act 2004 (see section 160(5) of that Act) unless the Department determines otherwise (in the case of a particular payment).
1870 c.35.
Paragraph 3A of Schedule 29 was inserted by section 159 of the Finance Act 2006 (c.25).
Note: if this period is 5 years or more, no lump sum is payable in respect of the phased retirement pension.
S.I
.
2009 No. 117
.
1998 c. 11.
1967 c5; the amount currently specified in S.R. 2004 No. 68 is £10,000.
1911 c.28, S.R. 1920 c.75, S.R. 1939 c. 21, S.R. 1989 c. 6.
Section 238A was inserted by the Finance Act 2011 (c.11), Schedule 17.
Words in reg. 181(3)(b) inserted (20.12.2023) by The National Security Act 2023 (Consequential Amendments of Subordinate Legislation) Regulations 2023 (S.I. 2023/1267), reg. 1(2), Sch. para. 39