Use the State Pension Credit qualifying age, and start-of-year status for Class 4 NI

changelog.d/class-4-state-pension-age-start-of-year.fixed.md

@@ -0,0 +1 @@
+Class 4 National Insurance now stops from the first tax year that begins on or after the day State Pension age is reached (Social Security (Contributions) Regulations 2001 reg 91(a)): a person over State Pension age on 6 April is excepted, and one who reaches it during the year pays Class 4 for that whole year. Before, anyone over State Pension age on 6 October was excepted.

changelog.d/spc-qualifying-age-class-4-spa.added.md

@@ -0,0 +1 @@
+Added `state_pension_credit_qualifying_age` and `has_attained_state_pension_credit_qualifying_age`, the qualifying age for State Pension Credit from each person's date of birth, and `ni_class_4_liable`, Class 4 liability by age at the start of the tax year.

changelog.d/spc-qualifying-age-class-4-spa.changed.md

@@ -0,0 +1 @@
+Winter Fuel Payment uses pensionable age from 2024-25 and the State Pension Credit qualifying age in earlier years, as the regulations in force in each year require.

changelog.d/spc-qualifying-age-class-4-spa.fixed.md

@@ -0,0 +1 @@
+Pension Credit, Universal Credit, Housing Benefit, Council Tax Reduction, Income Support, the benefit cap (which reaches only working-age Housing Benefit and Universal Credit) and Winter Fuel Payment now use the qualifying age for State Pension Credit (State Pension Credit Act 2002 s.1(6)) instead of each person's own State Pension age. For a man born before 6 December 1953 that is the State Pension age of a woman born on the same day, not 65, so these programmes change only in 2018-19 and earlier. National Insurance and State Pension keep using the person's own State Pension age; Class 4 now reads it at the start of the tax year (see the Class 4 entry). Housing Benefit and Council Tax Reduction choose their pension-age or working-age allowances, means tests and premium schedules with their own statutory tests (HB(SPC) Regs 2006 reg 5 and the CTR pensioner tests), which exclude families on Universal Credit, Income Support, income-based Jobseeker's Allowance or income-related Employment and Support Allowance; the pension-age severe disability premium follows the qualifying age. Income Support uses its own working-age premiums, and its age test applies to the claimant, who must also be the one in a prescribed category such as carer, so a mixed-age couple can claim it through the younger partner unless the couple is on Pension Credit (SSCBA 1992 s.124(1)(aa), (e) and (g)).

docs/book/programs/gov/dwp/state-pension.md

@@ -102,6 +102,35 @@ extracts. The weighted share of each age over State Pension age then matches
 the statute: three quarters of 66-year-olds in 2026-27, a quarter in 2027-28
 and none from 2028-29.
 
+Other programmes test State Pension age in two ways:
+
+- **The qualifying age for State Pension Credit** (State Pension Credit Act
+  2002 s.1(6)) is a woman's State Pension age, and for a man the State
+  Pension age of a woman born on the same day. `state_pension_credit_qualifying_age`
+  applies the timetable without rule (1), and
+  `has_attained_state_pension_credit_qualifying_age` is whether it is reached
+  by 6 October. Pension Credit, Universal Credit (Welfare Reform Act 2012
+  s.4(1)(b)), Housing Benefit (Housing Benefit Regulations 2006 reg 5 in both
+  sets), Council Tax Reduction's pension-age schemes, Income Support
+  (SSCBA 1992 s.124(1)(aa)), the benefit cap (which reaches only
+  working-age Housing Benefit and Universal Credit) and Winter Fuel Payment
+  (to September 2024) use it. It differs from
+  `is_SP_age` only for men born before 6 December 1953, so only in 2018-19
+  and earlier: a man born on 6 April 1952 reached it on 6 May 2014, nearly
+  three years before his State Pension age of 65.
+- **Class 4 National Insurance** stops from the first tax year that begins on
+  or after the day State Pension age is reached: a person over it at the
+  beginning of the tax year (6 April) is excepted (Social Security
+  (Contributions) Regulations 2001 reg 91(a)), so `ni_class_4_liable` needs
+  `months_since_state_pension_age` below 6. Someone who reaches it on 6 April
+  itself is read as over it at the beginning of that year. With default
+  whole-number ages in a household situation, the inferred birthday is
+  6 April. Entering an integer State Pension age therefore makes this
+  boundary reading determine the Class 4 result; fractional ages and explicit
+  birthday-month inputs can place the birthday on another day. Class 1 employee
+  contributions stop at State Pension age itself (SSCBA 1992 s.6(3)), which
+  the annual model reads as `is_SP_age`.
+
 A person attains an age at the start of the anniversary of their birth
 (Family Law Reform Act 1969 s.9(1)), and an age of "N years and M months" on
 the same day of the month, or the month's last day where that day does not

docs/book/programs/gov/hmrc/national-insurance.ipynb

@@ -171,7 +171,7 @@
   {
    "cell_type": "markdown",
    "metadata": {},
-   "source": "## How PolicyEngine computes National Insurance liability\n\nFor each person, PolicyEngine computes NI contributions class-by-class:\n\n- **Class 1 employee** (`ni_class_1_employee`): the sum of `ni_class_1_employee_primary` (main rate on earnings between the Primary Threshold and the Upper Earnings Limit) and `ni_class_1_employee_additional` (additional rate on earnings above the UEL). These primary contributions are due from age 16 until state pension age (`ni_liable`): SSCBA 1992 s.6(3) ends them at pensionable age.\n- **Class 1 employer** (`ni_class_1_employer`): paid on earnings above the Secondary Threshold; surfaced through the `ni_employer` variable. These secondary contributions are due on earners over 16 with no upper age limit (`ni_class_1_secondary_liable`), so employers keep paying them for employees over state pension age (SSCBA 1992 s.6(1)(b) and s.6(3)).\n- **Class 2** (`ni_class_2`): a flat weekly rate paid by the self-employed with profits above the Small Profits Threshold.\n- **Class 3** (`ni_class_3`): a voluntary flat weekly rate; the variable is exposed but defaults to zero unless explicitly set.\n- **Class 4** (`ni_class_4`): main rate between the Lower and Upper Profits Limits plus additional rate above the UPL, charged on `ni_class_4_profits`. Those are the trade profits chargeable to income tax under ITTOIA 2005 Part 2 Chapter 2 (`ni_class_4_profits_before_losses`: self-employment profit after capital allowances and the trading allowance), less trading losses as SSCBA 1992 Schedule 2 paragraph 3 allows (`ni_class_4_loss_relief`). A loss reduces only trade profits for Class 4: each year's losses (those brought forward, then the year's own loss, `ni_class_4_trading_loss`) are set against that year's trade profits, and the rest is carried forward until used (`ni_class_4_losses_brought_forward`, `ni_class_4_losses_carried_forward`). A year's own loss is the `trading_loss` entered for that year, so a loss entered once is relieved once: it is not counted again in the later years that `trading_loss` carries into. Carry-back claims and the paragraph 3(5) deductions for trade interest and royalties are not modelled. Where the person also pays primary Class 1 contributions (or, before 6 April 2024, Class 2 contributions), liability is capped at the annual maximum in regulation 100 of the Social Security (Contributions) Regulations 2001 (`ni_class_4_maximum`).\n\nThe individual total `national_insurance` sums the four employee and self-employed components directly — `ni_class_1_employee + ni_class_2 + ni_class_3 + ni_class_4` — so voluntary Class 3 contributions are included in the household-side liability. The convenience aggregates `ni_employee` (Class 1 employee only) and `ni_self_employed` (Class 2 + Class 4) are also exposed for reporting. The Class 1 *employer* charge (`ni_class_1_employer`, surfaced as `ni_employer`) is an employer-side cost rather than part of the individual's `national_insurance`, so it is tracked separately and feeds the government revenue aggregates on its own.\n\nParameters live in `policyengine_uk/parameters/gov/hmrc/national_insurance/` and the per-class formulas in `policyengine_uk/variables/gov/hmrc/national_insurance/`."
+   "source": "## How PolicyEngine computes National Insurance liability\n\nFor each person, PolicyEngine computes NI contributions class-by-class:\n\n- **Class 1 employee** (`ni_class_1_employee`): the sum of `ni_class_1_employee_primary` (main rate on earnings between the Primary Threshold and the Upper Earnings Limit) and `ni_class_1_employee_additional` (additional rate on earnings above the UEL). These primary contributions are due from age 16 until state pension age (`ni_liable`): SSCBA 1992 s.6(3) ends them at pensionable age.\n- **Class 1 employer** (`ni_class_1_employer`): paid on earnings above the Secondary Threshold; surfaced through the `ni_employer` variable. These secondary contributions are due on earners over 16 with no upper age limit (`ni_class_1_secondary_liable`), so employers keep paying them for employees over state pension age (SSCBA 1992 s.6(1)(b) and s.6(3)).\n- **Class 2** (`ni_class_2`): a flat weekly rate paid by the self-employed with profits above the Small Profits Threshold.\n- **Class 3** (`ni_class_3`): a voluntary flat weekly rate; the variable is exposed but defaults to zero unless explicitly set.\n- **Class 4** (`ni_class_4`): main rate between the Lower and Upper Profits Limits plus additional rate above the UPL, charged on `ni_class_4_profits`. Those are the trade profits chargeable to income tax under ITTOIA 2005 Part 2 Chapter 2 (`ni_class_4_profits_before_losses`: self-employment profit after capital allowances and the trading allowance), less trading losses as SSCBA 1992 Schedule 2 paragraph 3 allows (`ni_class_4_loss_relief`). A loss reduces only trade profits for Class 4: each year's losses (those brought forward, then the year's own loss, `ni_class_4_trading_loss`) are set against that year's trade profits, and the rest is carried forward until used (`ni_class_4_losses_brought_forward`, `ni_class_4_losses_carried_forward`). A year's own loss is the `trading_loss` entered for that year, so a loss entered once is relieved once: it is not counted again in the later years that `trading_loss` carries into. Carry-back claims and the paragraph 3(5) deductions for trade interest and royalties are not modelled. Where the person also pays primary Class 1 contributions (or, before 6 April 2024, Class 2 contributions), liability is capped at the annual maximum in regulation 100 of the Social Security (Contributions) Regulations 2001 (`ni_class_4_maximum`). Class 4 is due from age 16 until the first tax year that begins on or after the day the person reaches state pension age (`ni_class_4_liable`): regulation 91(a) excepts anyone over pensionable age at the beginning of the tax year, so a person who reaches it during a year pays for that whole year.\n\nThe individual total `national_insurance` sums the four employee and self-employed components directly \u2014 `ni_class_1_employee + ni_class_2 + ni_class_3 + ni_class_4` \u2014 so voluntary Class 3 contributions are included in the household-side liability. The convenience aggregates `ni_employee` (Class 1 employee only) and `ni_self_employed` (Class 2 + Class 4) are also exposed for reporting. The Class 1 *employer* charge (`ni_class_1_employer`, surfaced as `ni_employer`) is an employer-side cost rather than part of the individual's `national_insurance`, so it is tracked separately and feeds the government revenue aggregates on its own.\n\nParameters live in `policyengine_uk/parameters/gov/hmrc/national_insurance/` and the per-class formulas in `policyengine_uk/variables/gov/hmrc/national_insurance/`."
   },
   {
    "cell_type": "markdown",

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

@@ -260,7 +260,7 @@
   output:
     severe_disability_minimum_guarantee_addition: 86.05 * 52
 
-- name: The pension-age premium is zero below State Pension age
+- name: The pension-age premium is zero below the State Pension Credit qualifying age
   period: 2026
   absolute_error_margin: 0.01
   input:
@@ -277,3 +277,37 @@
         country: {2026: ENGLAND}
   output:
     pension_age_severe_disability_premium: 0
+
+- name: A mixed-age couple on Universal Credit uses the working-age premium schedule
+  # HB(SPC) Regs 2006 reg 5 and the CTR pensioner tests exclude a couple on
+  # Universal Credit, so the working-age allowance and premiums apply even
+  # though one partner is over State Pension age.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: {2026: 50}
+        is_disabled_for_benefits: {2026: true}
+      partner:
+        age: {2026: 70}
+        state_pension: {2026: 3_000}
+    benunits:
+      benunit:
+        members: [claimant, partner]
+    households:
+      household:
+        members: [claimant, partner]
+        country: {2026: ENGLAND}
+        tenure_type: {2026: RENT_FROM_COUNCIL}
+        rent: {2026: 6_240}
+        council_tax: {2026: 2_000}
+  output:
+    is_uc_entitled: true
+    housing_benefit_pension_age_regulations_apply: false
+    council_tax_reduction_pensioner: false
+    pension_age_severe_disability_premium: 0
+    # Legacy disability premium (couple) 64.00 * 52 = 3,328.
+    benefits_premiums: 64.00 * 52
+    # Working-age couple allowance 150.15 * 52 = 7,807.80, plus the premium.
+    council_tax_reduction_applicable_amount: (150.15 + 64.00) * 52

policyengine_uk/tests/policy/baseline/gov/dwp/housing_benefit_pension_age_means_test.yaml

@@ -0,0 +1,180 @@
+# HB Regs 2006 reg 5 and HB (SPC) Regs 2006 reg 5 route a claimant on
+# income-based JSA to the working-age regulations even after the qualifying
+# age. CTR SI 2012/2885 reg 3 applies the same exclusion to its pensioner test.
+# These tests preserve the model's existing historical allowance parameters:
+# 73.10 * 52 = 3,801.20 and 181 * 52 = 9,412, without asserting that the
+# shared pension-age allowance parameter reproduces every statutory age band.
+
+- name: Qualifying-age claimant on income-based JSA uses working-age HB and CTR allowances
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 64
+        months_since_last_birthday: 4
+        is_male: true
+    benunits:
+      benunit:
+        members: [claimant]
+        jsa_income: 100
+        income_support: 0
+        esa_income: 0
+        guarantee_credit: 0
+    households:
+      household:
+        members: [claimant]
+        rent: 6_240
+        tenure_type: RENT_FROM_COUNCIL
+  output:
+    has_attained_state_pension_credit_qualifying_age: true
+    is_SP_age: false
+    housing_benefit_eligible: true
+    housing_benefit_pension_age_regulations_apply: false
+    council_tax_reduction_pensioner: false
+    benefits_premiums: 0
+    housing_benefit_applicable_amount: 3_801.20
+    council_tax_reduction_applicable_amount: 3_801.20
+
+- name: Qualifying-age claimant without excluded benefits retains pension-age HB and CTR allowances
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 64
+        months_since_last_birthday: 4
+        is_male: true
+    benunits:
+      benunit:
+        members: [claimant]
+        jsa_income: 0
+        income_support: 0
+        esa_income: 0
+        guarantee_credit: 0
+    households:
+      household:
+        members: [claimant]
+        rent: 6_240
+        tenure_type: RENT_FROM_COUNCIL
+  output:
+    has_attained_state_pension_credit_qualifying_age: true
+    is_SP_age: false
+    housing_benefit_eligible: true
+    housing_benefit_pension_age_regulations_apply: true
+    council_tax_reduction_pensioner: true
+    benefits_premiums: 0
+    housing_benefit_applicable_amount: 9_412
+    council_tax_reduction_applicable_amount: 9_412
+
+- name: Synthetic component routing does not apply the pension-age guarantee-credit passport under working-age flags
+  # This fixes the scheme flags and income components to test their consumers;
+  # it does not assert lawful receipt of these benefits together. HB (SPC)
+  # reg 26 disregards all income and capital only within that scheme. Working
+  # HB reg 52 gives (12,000 - 6,000) / 250 * 52 = 1,248 tariff income here.
+  # The separate working-age capital passports are outside this component test.
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 64
+        months_since_last_birthday: 4
+        is_male: true
+        employment_income: 1_000
+        income_tax: 0
+        national_insurance: 0
+        pension_contributions: 0
+    benunits:
+      benunit:
+        members: [claimant]
+        housing_benefit_eligible: true
+        housing_benefit_pension_age_regulations_apply: false
+        council_tax_reduction_pensioner: false
+        guarantee_credit: 1_000
+        income_support: 0
+        jsa_income: 0
+        esa_income: 0
+        tax_credits: 0
+        benefits_premiums: 0
+        housing_benefit_applicable_income_disregard: 0
+        housing_benefit_applicable_income_childcare_element: 0
+    households:
+      household:
+        members: [claimant]
+        savings: 12_000
+  output:
+    has_attained_state_pension_credit_qualifying_age: true
+    housing_benefit_applicable_amount: 3_801.20
+    council_tax_reduction_applicable_amount: 3_801.20
+    housing_benefit_assessable_capital: 12_000
+    housing_benefit_tariff_income: 1_248
+    housing_benefit_applicable_income: 2_248
+
+- name: Synthetic component routing applies the guarantee-credit passport under pension-age flags
+  # The same controlled components now fall under the pension-age scheme.
+  # HB (SPC) reg 26: "the whole of his capital and income shall be disregarded".
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 64
+        months_since_last_birthday: 4
+        is_male: true
+        employment_income: 1_000
+        income_tax: 0
+        national_insurance: 0
+        pension_contributions: 0
+    benunits:
+      benunit:
+        members: [claimant]
+        housing_benefit_eligible: true
+        housing_benefit_pension_age_regulations_apply: true
+        council_tax_reduction_pensioner: true
+        guarantee_credit: 1_000
+        income_support: 0
+        jsa_income: 0
+        esa_income: 0
+        tax_credits: 0
+        benefits_premiums: 0
+        housing_benefit_applicable_income_disregard: 0
+        housing_benefit_applicable_income_childcare_element: 0
+    households:
+      household:
+        members: [claimant]
+        savings: 12_000
+  output:
+    has_attained_state_pension_credit_qualifying_age: true
+    housing_benefit_applicable_amount: 9_412
+    council_tax_reduction_applicable_amount: 9_412
+    housing_benefit_assessable_capital: 0
+    housing_benefit_tariff_income: 0
+    housing_benefit_applicable_income: 0
+
+- name: Synthetic component routing keeps the working-age tariff income for savings-credit-only status under working-age flags
+  # This fixes the scheme flags and savings-credit-only status to test their
+  # consumer; it does not assert a lawful award. HB (SPC) reg 27(5) lifts the
+  # tariff income rule only within the pension-age regulations. Working HB
+  # reg 52 gives (12,000 - 6,000) / 250 * 52 = 1,248 tariff income here.
+  period: 2017
+  absolute_error_margin: 0.01
+  input:
+    people:
+      claimant:
+        age: 64
+        months_since_last_birthday: 4
+        is_male: true
+    benunits:
+      benunit:
+        members: [claimant]
+        housing_benefit_pension_age_regulations_apply: false
+        in_receipt_of_savings_credit_only: true
+        guarantee_credit: 0
+    households:
+      household:
+        members: [claimant]
+        savings: 12_000
+  output:
+    housing_benefit_assessable_capital: 12_000
+    housing_benefit_tariff_income: 1_248