Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, whether means-testing for the purpose of calculating benefits is calculated using income before or after deductions for pension contributions are made.

For claimants of Jobseeker’s Allowance, Income Support, income-related Employment and Support allowance or Pension Credit, half of any contributions towards an occupational or personal pension scheme are deducted from any income from employed earners’ employment taken into account when calculating entitlement. In the case of self-employed earners, half of all premiums paid into a personal pension scheme are deducted from the claimant’s income taken into account.

For Universal Credit, earned income is only taken into account after allowing for 100% of pension contributions to appropriate schemes. Universal Credit is therefore intended to incentivise more people on a low income to put money aside to save for their later lives.