Add private_pension_wealth as an explicit capital disregard; corporate_wealth keeps the share-like holdings

changelog.d/uk-pension-wealth-disregard-452.added.md

@@ -0,0 +1 @@
+Added `private_pension_wealth` (Household, imputed from the Wealth and Assets Survey) as an explicit capital disregard: it is not a capital source in any means test, `corporate_wealth` no longer describes private pensions, `total_wealth` includes it, and a new `corporate_sector_wealth` (corporate plus private pension wealth) is the allocation key for shareholding, corporate land value and the employer NI capital response so those keys do not move when the data splits pension wealth out of corporate wealth (policyengine-uk-data#452).

docs/book/assumptions/growthfactors.md

@@ -57,7 +57,7 @@ We derive these rates from OBR GDP growth and ONS population projections.
 |-------------|------|------|------|------|------|------|------|------|
 | Growth rate | 9.2% | 5.0% | 3.8% | 2.8% | 2.8% | 3.1% | 3.3% | 3.3% |
 
-We use per capita GDP for these variables: `capital_gains`, `capital_gains_before_response`, `corporate_wealth`, `dividend_income`, `gross_financial_wealth`, `lump_sum_income`, `main_residence_value`, `maintenance_income`, `miscellaneous_income`, `mortgage_capital_repayment`, `net_financial_wealth`, `non_residential_property_value`, `other_investment_income`, `other_residential_property_value`, `owned_land`, `pension_income`, `private_transfer_income`, `property_income`, `savings`, `savings_interest_income`, `sublet_income`
+We use per capita GDP for these variables: `capital_gains`, `capital_gains_before_response`, `corporate_wealth`, `dividend_income`, `gross_financial_wealth`, `lump_sum_income`, `main_residence_value`, `maintenance_income`, `miscellaneous_income`, `mortgage_capital_repayment`, `net_financial_wealth`, `non_residential_property_value`, `other_investment_income`, `other_residential_property_value`, `owned_land`, `pension_income`, `private_pension_wealth`, `private_transfer_income`, `property_income`, `savings`, `savings_interest_income`, `sublet_income`
 
 ## Council tax
 

policyengine_uk/data/uprating_indices.yaml

@@ -72,6 +72,7 @@ gov.economic_assumptions.yoy_growth.obr.per_capita.gdp:
 - other_residential_property_value
 - owned_land
 - pension_income
+- private_pension_wealth
 - private_transfer_income
 - property_income
 - savings

policyengine_uk/parameters/gov/dwp/ESA/income/capital/sources.yaml

@@ -7,7 +7,10 @@ description: >
   financial assets, `other_residential_property_value` for residential
   property other than the home, and `non_residential_property_value` for other
   land and premises. `main_residence_value` is excluded because Schedule 9
-  paragraph 1 disregards premises occupied as the claimant's home. Other
+  paragraph 1 disregards premises occupied as the claimant's home.
+  `private_pension_wealth` is excluded because Schedule 9 paragraphs 28 and 29
+  disregard the value of the right to receive an occupational or personal
+  pension and the value of funds held under a personal pension scheme. Other
   Schedule 9 disregards and the higher residential-care capital disregard are
   not yet modeled because the current dataset does not isolate those states or
   asset holdings. Because the dataset only provides household-level capital
@@ -24,6 +27,8 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/2008/794/regulation/111
     - title: Employment and Support Allowance Regulations 2008 Schedule 9 para. 1
       href: https://www.legislation.gov.uk/uksi/2008/794/schedule/9/paragraph/1
+    - title: Employment and Support Allowance Regulations 2008 Schedule 9 paras. 28-29
+      href: https://www.legislation.gov.uk/uksi/2008/794/schedule/9/paragraph/28
 values:
   2008-10-27:
     - savings

policyengine_uk/parameters/gov/dwp/JSA/income/capital/sources.yaml

@@ -7,7 +7,10 @@ description: >
   financial assets, `other_residential_property_value` for residential
   property other than the home, and `non_residential_property_value` for other
   land and premises. `main_residence_value` is excluded because Schedule 8
-  paragraph 1 disregards premises occupied as the claimant's home. Other
+  paragraph 1 disregards premises occupied as the claimant's home.
+  `private_pension_wealth` is excluded because Schedule 8 paragraphs 28 and 29
+  disregard the value of the right to receive an occupational or personal
+  pension and the value of funds held under a personal pension scheme. Other
   Schedule 8 disregards, the higher residential-care capital disregard, and
   the separate child-capital disregard are not yet modeled because the current
   dataset does not isolate those states or asset holdings. Because the dataset
@@ -25,6 +28,8 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/1996/207/regulation/108
     - title: Jobseeker's Allowance Regulations 1996 Schedule 8 para. 1
       href: https://www.legislation.gov.uk/uksi/1996/207/schedule/8/paragraph/1
+    - title: Jobseeker's Allowance Regulations 1996 Schedule 8 paras. 28-29
+      href: https://www.legislation.gov.uk/uksi/1996/207/schedule/8/paragraph/28
 values:
   1996-10-07:
     - savings

policyengine_uk/parameters/gov/dwp/housing_benefit/means_test/capital/sources.yaml

@@ -8,12 +8,15 @@ description: >
   `other_residential_property_value` for residential property other than the
   home, and `non_residential_property_value` for other land and premises.
   `main_residence_value` is excluded because Schedule 6 paragraph 1 disregards
-  premises occupied as the claimant's home. The current dataset definition for
-  `corporate_wealth` also bundles private pension wealth together with those
-  countable assets; the model currently includes that mixed bucket rather than
-  omitting share-like financial wealth entirely, so pension-capital treatment
-  remains an unresolved data limitation. Other Schedule 6 disregards within
-  these broad asset classes are not yet split out separately. Because the
+  premises occupied as the claimant's home. `private_pension_wealth` is
+  excluded because Schedule 6 paragraphs 31 and 32 disregard the value of the
+  right to receive an occupational or personal pension and the value of funds
+  held under a personal pension scheme (paragraph 24 of Schedule 6 to the
+  pension-age regulations and paragraphs 32 and 33 of Schedule 7 to the
+  Northern Ireland regulations make the same disregard). Datasets built before
+  private pension wealth was split out of `corporate_wealth` still carry it
+  inside that countable bucket. Other Schedule 6 disregards within these broad
+  asset classes are not yet split out separately. Because the
   dataset only provides household-level capital stocks, the model allocates
   them across benunits using an adult-share proxy.
 metadata:
@@ -25,10 +28,16 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/2006/213/regulation/44
     - title: The Housing Benefit Regulations 2006 Schedule 6 para. 1
       href: https://www.legislation.gov.uk/uksi/2006/213/schedule/6/paragraph/1
+    - title: The Housing Benefit Regulations 2006 Schedule 6 paras. 31-32
+      href: https://www.legislation.gov.uk/uksi/2006/213/schedule/6/paragraph/31
+    - title: The Housing Benefit Regulations (Northern Ireland) 2006 Schedule 7 paras. 32-33
+      href: https://www.legislation.gov.uk/nisr/2006/405/schedule/7/paragraph/32
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 reg. 44(1)
       href: https://www.legislation.gov.uk/uksi/2006/214/regulation/44
     - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 Schedule 6 para. 1
       href: https://www.legislation.gov.uk/uksi/2006/214/schedule/6/paragraph/1
+    - title: The Housing Benefit (Persons who have attained the qualifying age for state pension credit) Regulations 2006 Schedule 6 para. 24
+      href: https://www.legislation.gov.uk/uksi/2006/214/schedule/6/paragraph/24
 values:
   2006-04-10:
     - savings

policyengine_uk/parameters/gov/dwp/income_support/means_test/capital/sources.yaml

@@ -1,4 +1,8 @@
-description: Capital sources included in the Income Support capital test.
+description: >
+  Capital sources included in the Income Support capital test.
+  `private_pension_wealth` is excluded because Schedule 10 paragraphs 23 and
+  23A disregard the value of the right to receive an occupational or personal
+  pension and the value of funds held under a personal pension scheme.
 metadata:
   label: Income Support capital sources
   period: year
@@ -10,6 +14,8 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/1987/1967/data.pdf#page=70
     - title: Income Support (General) Regulations 1987 Sch. 10
       href: https://www.legislation.gov.uk/uksi/1987/1967/data.pdf#page=188
+    - title: Income Support (General) Regulations 1987 Sch. 10 paras. 23-23A
+      href: https://www.legislation.gov.uk/uksi/1987/1967/schedule/10/paragraph/23
   unit: list
 
 values:

policyengine_uk/parameters/gov/dwp/pension_credit/income/capital/sources.yaml

@@ -1,6 +1,11 @@
 description: >
   PolicyEngine approximation of Pension Credit capital sources that count
   toward deemed income from capital, excluding the claimant's main home.
+  `private_pension_wealth` is excluded because Schedule V paragraphs 22 and 23
+  (Part I) disregard the value of the right to receive income from an
+  occupational or personal pension scheme or under a retirement annuity
+  contract; the notional income rule for undrawn money purchase pots
+  (regulation 18) is not modelled.
 metadata:
   label: Pension Credit capital sources
   unit: list
@@ -9,6 +14,8 @@ metadata:
       title: State Pension Credit Regulations 2002 reg. 15
     - href: https://www.legislation.gov.uk/uksi/2002/1792/schedule/5
       title: State Pension Credit Regulations 2002 Sch. 5
+    - href: https://www.legislation.gov.uk/uksi/2002/1792/schedule/V/paragraph/22
+      title: State Pension Credit Regulations 2002 Sch. 5 paras. 22-23
     - href: https://www.gov.uk/government/publications/pension-credit-technical-guidance/a-detailed-guide-to-pension-credit-for-advisers-and-others
       title: Pension Credit technical guidance
   propagate_metadata_to_children: true

policyengine_uk/parameters/gov/dwp/universal_credit/means_test/capital/sources.yaml

@@ -7,7 +7,12 @@ description: >
   home, `non_residential_property_value` for other land and premises, and
   `corporate_wealth` for shares and similar investment assets. `main_residence_value`
   is excluded because Schedule 10 paragraph 1 disregards premises occupied as
-  the person's home. Other Schedule 10 disregards within these broad asset
+  the person's home. `private_pension_wealth` is excluded because Schedule 10
+  paragraph 10 disregards the value of any right to receive a pension under an
+  occupational or personal pension scheme (or any other scheme registered under
+  section 153 of the Finance Act 2004; paragraph 10 of Schedule 10 to the
+  Northern Ireland regulations makes the same disregard); pension income
+  actually drawn counts as unearned income instead. Other Schedule 10 disregards within these broad asset
   classes are not yet split out separately. Where only household-level capital
   is available for a multi-benunit household, the model uses a household-wide
   adult-share proxy for residual capital because the dataset does not identify
@@ -31,6 +36,10 @@ metadata:
       href: https://www.legislation.gov.uk/uksi/2013/376/regulation/48/1
     - title: The Universal Credit Regulations 2013 Schedule 10 para. 1
       href: https://www.legislation.gov.uk/uksi/2013/376/schedule/10/paragraph/1
+    - title: The Universal Credit Regulations 2013 Schedule 10 para. 10
+      href: https://www.legislation.gov.uk/uksi/2013/376/schedule/10/paragraph/10
+    - title: The Universal Credit Regulations (Northern Ireland) 2016 Schedule 10 para. 10
+      href: https://www.legislation.gov.uk/nisr/2016/216/schedule/10/paragraph/10
 values:
   2013-04-29:
     - savings

policyengine_uk/tests/policy/baseline/finance/benefit/family/esa_income/esa_income_capital.yaml

@@ -191,3 +191,23 @@
     esa_income: 0
     income_support_eligible: true
     income_support: 5_252.0073
+
+- name: Income-related ESA capital test disregards private pension wealth
+  period: 2026
+  absolute_error_margin: 0
+  input:
+    people:
+      claimant:
+        age: 40
+        esa_income_reported: 1_000
+    benunits:
+      benunit:
+        members: claimant
+    households:
+      household:
+        members: claimant
+        savings: 1_000
+        corporate_wealth: 2_000
+        private_pension_wealth: 150_000
+  output:
+    esa_income_assessable_capital: 3_000

policyengine_uk/tests/policy/baseline/finance/benefit/family/housing_benefit/housing_benefit_capital.yaml

@@ -247,3 +247,25 @@
     housing_benefit_tariff_income: 0
     housing_benefit_applicable_income: 0
     housing_benefit_eligible: true
+
+- name: Private pension wealth is disregarded from Housing Benefit capital
+  period: 2025
+  absolute_error_margin: 0
+  input:
+    people:
+      person:
+        age: 30
+        in_social_housing: true
+        housing_benefit_reported: 1
+    benunits:
+      benunit:
+        members: person
+        would_claim_uc: false
+    households:
+      household:
+        members: person
+        savings: 5_000
+        private_pension_wealth: 150_000
+  output:
+    housing_benefit_assessable_capital: 5_000
+    housing_benefit_eligible: true

policyengine_uk/tests/policy/baseline/finance/benefit/family/income_support/income_support_capital.yaml

@@ -210,3 +210,27 @@
         savings: 18_000
   output:
     income_support_assessable_capital: [18_000, 18_000]
+
+- name: Income Support capital test disregards private pension wealth
+  period: 2021
+  absolute_error_margin: 1
+  input:
+    people:
+      p1:
+        age: 26
+        income_support_reported: true
+      c1:
+        age: 4
+        is_child: true
+    benunits:
+      b1:
+        members: [p1, c1]
+        would_claim_IS: true
+    households:
+      household:
+        members: [p1, c1]
+        savings: 1000
+        corporate_wealth: 2000
+        private_pension_wealth: 150000
+  output:
+    income_support_assessable_capital: 3000

policyengine_uk/tests/policy/baseline/finance/benefit/family/jsa_income/jsa_income_capital.yaml

@@ -165,3 +165,23 @@
         savings: 18_000
   output:
     jsa_income_assessable_capital: [18_000, 18_000]
+
+- name: Income-based JSA capital test disregards private pension wealth
+  period: 2026
+  absolute_error_margin: 0
+  input:
+    people:
+      claimant:
+        age: 30
+        jsa_income_reported: 1_000
+    benunits:
+      benunit:
+        members: claimant
+    households:
+      household:
+        members: claimant
+        savings: 1_000
+        corporate_wealth: 2_000
+        private_pension_wealth: 150_000
+  output:
+    jsa_income_assessable_capital: 3_000

policyengine_uk/tests/policy/baseline/finance/benefit/family/universal_credit/income/uc_unearned_income.yaml

@@ -227,3 +227,27 @@
   output:
     uc_tariff_income: 52.2
     uc_unearned_income: 52.2
+
+- name: Dividend income stays unearned when only disregarded pension wealth is held
+  period: 2025
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person:
+        age: 30
+        dividend_income: 120
+    benunits:
+      benunit:
+        members: person
+    households:
+      household:
+        members: person
+        savings: 6_001
+        private_pension_wealth: 150_000
+  output:
+    # Pension wealth is disregarded capital (UC Regs 2013 Sch 10 para 10), so
+    # the dividend gate keys on corporate_wealth alone: with no share-like
+    # holdings the dividends are not folded into capital and stay unearned.
+    uc_assessable_capital: 6_001
+    uc_tariff_income: 4.35 * 12
+    uc_unearned_income: 4.35 * 12 + 120

policyengine_uk/tests/policy/baseline/finance/benefit/family/universal_credit/is_UC_eligible.yaml

@@ -315,3 +315,22 @@
   output:
     uc_assessable_capital: 0
     is_uc_eligible: true
+
+- name: Private pension wealth is disregarded from Universal Credit capital
+  period: 2025
+  absolute_error_margin: 0
+  input:
+    people:
+      person:
+        age: 30
+    benunits:
+      benunit:
+        members: person
+    households:
+      household:
+        members: person
+        savings: 10_000
+        private_pension_wealth: 150_000
+  output:
+    uc_assessable_capital: 10_000
+    is_uc_eligible: true

policyengine_uk/tests/policy/baseline/gov/dwp/pension_credit/pension_credit_income.yaml

@@ -105,3 +105,21 @@
     standard_minimum_guarantee: 12_376
     guarantee_credit: 3_016
     pension_credit: 3_016
+
+- name: Pension Credit capital disregards private pension wealth
+  period: 2026
+  absolute_error_margin: 1
+  input:
+    people:
+      person1:
+        age: 81
+    benunits:
+      benunit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        savings: 12_000
+        private_pension_wealth: 200_000
+  output:
+    pension_credit_assessable_capital: 12_000

policyengine_uk/tests/policy/baseline/household/wealth/private_pension_wealth.yaml

@@ -0,0 +1,39 @@
+- name: Private pension wealth counts in total wealth and corporate sector wealth
+  period: 2025
+  absolute_error_margin: 0
+  input:
+    people:
+      person:
+        age: 40
+    benunits:
+      benunit:
+        members: person
+    households:
+      household:
+        members: person
+        property_wealth: 200_000
+        corporate_wealth: 30_000
+        private_pension_wealth: 120_000
+        savings: 10_000
+  output:
+    corporate_sector_wealth: 150_000
+    total_wealth: 360_000
+
+- name: Private pension wealth defaults to zero so corporate sector wealth equals corporate wealth
+  period: 2025
+  absolute_error_margin: 0
+  input:
+    people:
+      person:
+        age: 40
+    benunits:
+      benunit:
+        members: person
+    households:
+      household:
+        members: person
+        corporate_wealth: 30_000
+  output:
+    private_pension_wealth: 0
+    corporate_sector_wealth: 30_000
+    total_wealth: 30_000