Count savings credit in Housing Benefit income where the Pension Credit award is savings credit only

changelog.d/hb-savings-credit-only-income.fixed.md

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+Use the Pension Credit assessment of income and capital, plus the savings credit payable, for Housing Benefit where the Pension Credit award is savings credit only (HB(SPC) Regs 2006 reg 27). For pensioners without earnings, while the award remains savings credit only, a rise in private pension no longer lowers net income (tested for council tenants in Great Britain); losing Pension Credit passports, such as the free TV licence at 75, still applies when savings credit ends.

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

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+# Savings-credit-only cases: "In determining the income and capital of a
+# claimant who has, or whose partner has, an award of state pension credit
+# comprising only the savings credit, the relevant authority shall ... use the
+# calculation or estimate of the claimant's or, as the case may be, the
+# claimant's partner's income and capital made by the Secretary of State for
+# the purpose of determining that award." (SI 2006/214 reg 27(1); NI: SR
+# 2006/406 reg 25(1).) The authority modifies that net income only for the
+# items in reg 27(4), the first being "the amount of the savings credit
+# payable"; Housing Benefit's own income rules (regs 29 to 49) do not apply to
+# it (reg 27(5)); and capital is the Secretary of State's calculation, with the
+# £16,000 limit applied to it (reg 27(6)).
+#
+# 2026 parameters: Pension Credit standard minimum guarantee £238.00 a week
+# single (12,376 a year) and £363.25 couple (18,889); savings credit threshold
+# £208.07 single (10,819.64) and £329.75 couple (17,147); savings credit
+# phase-in 60% and withdrawal 40%, so the maximum savings credit is
+# 0.6 x (12,376 - 10,819.64) = 933.82 single and 0.6 x (18,889 - 17,147) =
+# 1,045.20 couple; the Pension Credit child addition £69.98 (3,638.96) for a
+# child born after 5 April 2017;
+# Pension Credit deemed income and pension-age Housing Benefit tariff income
+# both £1 a week for each £500 (or part) of capital over £10,000; Housing
+# Benefit capital limit £16,000; aged personal allowance £256.00 a week single
+# (13,312); taper 65%; income tax personal allowance 12,570 and basic rate 20%.
+# Every Pension Credit claimant and partner is over State Pension age and
+# reached it before April 2016, so can have savings credit, and pays no
+# National Insurance.
+#
+# Robustness to the other open Housing Benefit fixes: the tenants rent from
+# the council, so the Local Housing Allowance order cannot apply; every case
+# sets housing_benefit_applicable_income_disregard to the value the earnings
+# disregard fix (PolicyEngine/policyengine-uk#1908) gives, 0 for a family with
+# no earnings; and no claimant has a disability benefit, so the severe
+# disability premium fix (#1938) does not change the applicable amount.
+
+- name: Case 1, savings credit only, the savings credit payable is added to the Pension Credit income.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 11_000
+        private_pension_income: 2_000
+    benunits:
+      benunit:
+        members: [person1]
+        housing_benefit_applicable_income_disregard: 0
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 0
+  output:
+    # (13,000 - 12,570) x 0.2 = 86.
+    income_tax: 86
+    # 13,000 - 86 = 12,914, above the minimum guarantee of 12,376.
+    pension_credit_income: 12_914
+    guarantee_credit: 0
+    # 933.82 - 0.4 x (12,914 - 12,376) = 933.82 - 215.20 = 718.62.
+    savings_credit: 718.62
+    pension_credit: 718.62
+    in_receipt_of_savings_credit_only: true
+    # Reg 27(4)(a): 12,914 + 718.62 = 13,632.62.
+    housing_benefit_savings_credit_only_income: 13_632.62
+    housing_benefit_applicable_income: 13_632.62
+    housing_benefit_applicable_amount: 13_312
+    # 7,800 - 0.65 x (13,632.62 - 13,312) = 7,800 - 208.40 = 7,591.60. On
+    # the Housing Benefit rules the income, 12,914, is below the applicable
+    # amount, and Housing Benefit would be the full 7,800.
+    housing_benefit: 7_591.60
+
+- name: Case 2, savings credit only with capital, the Pension Credit deemed income is counted once.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 11_000
+        private_pension_income: 2_000
+    benunits:
+      benunit:
+        members: [person1]
+        housing_benefit_applicable_income_disregard: 0
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 12_300
+  output:
+    # (12,300 - 10,000) / 500 = 4.6, so 5 steps; 5 x 52 = 260.
+    pension_credit_assessable_capital: 12_300
+    pension_credit_deemed_income: 260
+    # 13,000 - 86 + 260 = 13,174.
+    pension_credit_income: 13_174
+    # 933.82 - 0.4 x (13,174 - 12,376) = 933.82 - 319.20 = 614.62.
+    savings_credit: 614.62
+    in_receipt_of_savings_credit_only: true
+    # Reg 27(6): the Pension Credit assessment of capital.
+    housing_benefit_assessable_capital: 12_300
+    # Reg 27(5): no Housing Benefit tariff income on top of the deemed income.
+    housing_benefit_tariff_income: 0
+    # 13,174 + 614.62 = 13,788.62.
+    housing_benefit_applicable_income: 13_788.62
+    # 7,800 - 0.65 x (13,788.62 - 13,312) = 7,800 - 309.80 = 7,490.20.
+    housing_benefit: 7_490.20
+
+- name: Case 3, savings credit only couple with a non-dependant, the 16,000 limit applies to the Pension Credit capital.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 9_000
+      person2:
+        age: 78
+        state_pension: 9_000
+      person3:
+        age: 40
+        employment_income: 20_000
+    benunits:
+      benunit1:
+        members: [person1, person2]
+        housing_benefit_applicable_income_disregard: 0
+      benunit2:
+        members: [person3]
+    households:
+      household:
+        members: [person1, person2, person3]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 20_000
+  output:
+    # Pension Credit splits household capital across the two pension-age
+    # adults only, so the couple has all 20,000: 20 steps, 20 x 52 = 1,040 of
+    # deemed income. Each State Pension is below the personal allowance.
+    pension_credit_assessable_capital: [20_000, 0]
+    # 18,000 + 1,040 = 19,040, above the couple minimum guarantee of 18,889.
+    # The non-dependant's is computed but he cannot have Pension Credit:
+    # 20,000 - 1,486 income tax - 594.40 National Insurance = 17,919.60.
+    pension_credit_income: [19_040, 17_919.60]
+    guarantee_credit: [0, 0]
+    # 1,045.20 - 0.4 x (19,040 - 18,889) = 1,045.20 - 60.40 = 984.80.
+    savings_credit: [984.80, 0]
+    in_receipt_of_savings_credit_only: [true, false]
+    # Reg 27(6): the couple's capital is the Pension Credit's 20,000, not the
+    # household adult share of 20,000 x 2 / 3 = 13,333.33 used otherwise; the
+    # non-dependant keeps the adult share of 6,666.67.
+    housing_benefit_assessable_capital: [20_000, 6_666.67]
+    # 20,000 is over the 16,000 limit (reg 43, applied by reg 27(6)).
+    housing_benefit_eligible: [false, false]
+    housing_benefit: [0, 0]
+
+- name: Case 4, savings credit only with earnings, the earnings disregard is deducted.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 11_000
+        employment_income: 2_000
+    benunits:
+      benunit:
+        members: [person1]
+        # £5 a week for a single claimant with earnings (Sch 4 para 7(a)),
+        # the same as the Pension Credit disregard (SPC Regs 2002 Sch VI
+        # para 5(a)); 5 x 52 = 260. Pension Credit income in the model
+        # disregards no earnings, so deducting it gives the Secretary of
+        # State's figure.
+        housing_benefit_applicable_income_disregard: 260
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 0
+  output:
+    # 13,000 - 86 = 12,914, as in case 1.
+    pension_credit_income: 12_914
+    savings_credit: 718.62
+    in_receipt_of_savings_credit_only: true
+    # 12,914 + 718.62 - 260 = 13,372.62.
+    housing_benefit_applicable_income: 13_372.62
+    # 7,800 - 0.65 x (13,372.62 - 13,312) = 7,800 - 39.40 = 7,760.60.
+    housing_benefit: 7_760.60
+
+- name: Case 5, savings credit only lone parent in work, childcare charges and the lone parent and additional earnings disregards are deducted.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 78
+        state_pension: 11_000
+        employment_income: 7_000
+        # 20 hours a week, so remunerative work (reg 6) and the reg 31
+        # condition for deducting childcare charges are met.
+        hours_worked: 1_040
+      person2:
+        age: 8
+        childcare_expenses: 2_600
+    benunits:
+      benunit:
+        members: [person1, person2]
+        # Reg 27(4)(c)(i): the higher amount disregarded for a lone parent's
+        # earnings, £25 a week (Sch 4 para 2) against Pension Credit's £20
+        # (SPC Regs 2002 Sch VI para 1); and (d): the additional £17.10 (Sch
+        # 4 para 9(1)) for a lone parent working 16 hours or more whose net
+        # earnings cover the disregards and childcare. Pension Credit income
+        # in the model disregards no earnings, so the whole of both is
+        # deducted: (25 + 17.10) x 52 = 2,189.20, the value #1908 gives.
+        housing_benefit_applicable_income_disregard: 2_189.20
+    households:
+      household:
+        members: [person1, person2]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 0
+  output:
+    # (18,000 - 12,570) x 0.2 = 1,086; 18,000 - 1,086 = 16,914.
+    pension_credit_income: 16_914
+    # 12,376 + 3,638.96 = 16,014.96.
+    minimum_guarantee: 16_014.96
+    guarantee_credit: 0
+    # 933.82 - 0.4 x (16,914 - 16,014.96) = 933.82 - 359.62 = 574.20.
+    savings_credit: 574.20
+    in_receipt_of_savings_credit_only: true
+    # Reg 27(4)(b): 2,600 of childcare (£50 a week), below the weekly
+    # maximum and the earnings.
+    housing_benefit_applicable_income_childcare_element: 2_600
+    # 16,914 + 574.20 - 2,600 - 2,189.20 = 12,699.
+    housing_benefit_savings_credit_only_income: 12_699
+    housing_benefit_applicable_income: 12_699
+
+- name: Case 6, guarantee credit and savings credit together, the award is not savings credit only and the guarantee credit passport applies.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 12_000
+    benunits:
+      benunit:
+        members: [person1]
+        housing_benefit_applicable_income_disregard: 0
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 0
+  output:
+    # 12,000 is below the personal allowance, so no income tax.
+    pension_credit_income: 12_000
+    # 12,376 - 12,000 = 376.
+    guarantee_credit: 376
+    # min(933.82, 0.6 x (12,000 - 10,819.64)) = 708.22.
+    savings_credit: 708.22
+    in_receipt_of_savings_credit_only: false
+    housing_benefit_applicable_income: 0
+    housing_benefit: 7_800
+
+- name: Case 7, no Pension Credit, the Housing Benefit rules apply.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 11_000
+        private_pension_income: 6_000
+    benunits:
+      benunit:
+        members: [person1]
+        housing_benefit_applicable_income_disregard: 0
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 12_300
+  output:
+    # (17,000 - 12,570) x 0.2 = 886; 17,000 - 886 + 260 = 16,374.
+    pension_credit_income: 16_374
+    # 933.82 - 0.4 x (16,374 - 12,376) is negative.
+    savings_credit: 0
+    in_receipt_of_savings_credit_only: false
+    housing_benefit_assessable_capital: 12_300
+    housing_benefit_tariff_income: 260
+    # 17,000 - 886 + 260 = 16,374.
+    housing_benefit_applicable_income: 16_374
+    # 7,800 - 0.65 x (16,374 - 13,312) = 7,800 - 1,990.30 = 5,809.70.
+    housing_benefit: 5_809.70
+
+- name: Case 8, savings credit computed but Pension Credit not claimed, the Housing Benefit rules apply.
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      person1:
+        age: 80
+        state_pension: 11_000
+        private_pension_income: 2_000
+    benunits:
+      benunit:
+        members: [person1]
+        would_claim_pc: false
+        housing_benefit_applicable_income_disregard: 0
+    households:
+      household:
+        members: [person1]
+        rent: 7_800
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 0
+  output:
+    savings_credit: 718.62
+    pension_credit: 0
+    # There is no award, so reg 27 does not apply.
+    in_receipt_of_savings_credit_only: false
+    # 12,914, below the applicable amount of 13,312.
+    housing_benefit_applicable_income: 12_914
+    housing_benefit: 7_800

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

@@ -1,12 +1,12 @@
 # HB(SPC) Regs 2006 Sch 3 para 6, with the non-dependant definition in
 # reg 3: these cases assert final awards without a Guarantee Credit passport.
 # The final HB and CTR awards include the model's current income rules,
-# including two known defects outside this PR: no Savings Credit in HB
-# income for a savings-credit-only claimant (#2112), and no non-dependant
-# deduction exemption for a claimant on Attendance Allowance (#2007). The
-# premium and applicable-amount assertions do not depend on them. Each HB
-# award is the rent less 65% of income after tax above the applicable
-# amount; State Pension gets no earnings disregard (#1908).
+# including a known defect outside this file: no non-dependant deduction
+# exemption for a claimant on Attendance Allowance (#2007). The premium and
+# applicable-amount assertions do not depend on it. Each HB award is the
+# rent less 65% of income after tax, plus the savings credit where the award
+# is savings credit only (HB (SPC) Regs 2006 reg 27(4)(a)), above the
+# applicable amount; State Pension gets no earnings disregard (#1908).
 
 - name: One qualifying pensioner and a non-blind partner get no HB or CTR severe premium
   period: 2026
@@ -63,7 +63,10 @@
   output:
     guarantee_credit: 0
     pension_age_severe_disability_premium: 172.10 * 52
-    housing_benefit: 6_146.01
+    # Savings credit only (569.28): HB income is Pension Credit income plus
+    # the savings credit (HB (SPC) Regs 2006 reg 27(4)(a)), 0.65 x 569.28 =
+    # 370.03 below the figure without it.
+    housing_benefit: 5_775.98
     council_tax_benefit: 1_857.22
 
 - name: A qualifying pensioner with a blind non-qualifying partner gets one HB and CTR rate
@@ -92,7 +95,10 @@
   output:
     guarantee_credit: 0
     pension_age_severe_disability_premium: 86.05 * 52
-    housing_benefit: 5_317.52
+    # Savings credit only (59.44): HB income is Pension Credit income plus
+    # the savings credit (HB (SPC) Regs 2006 reg 27(4)(a)), 0.65 x 59.44 =
+    # 38.64 below the figure without it.
+    housing_benefit: 5_278.88
     council_tax_benefit: 1_704.27
 
 - name: A non-ignored adult resident blocks the pensioner's HB and CTR severe premium
@@ -163,7 +169,10 @@
     has_non_dependant_for_severe_disability_premium: [true, false]
     pension_age_severe_disability_premium: [0, 0]
     housing_benefit_applicable_amount: [13_312, 0]
-    housing_benefit: [3_898.70, 0]
+    # Savings credit only (908.46): HB income is Pension Credit income plus
+    # the savings credit (HB (SPC) Regs 2006 reg 27(4)(a)), 0.65 x 908.46 =
+    # 590.50 below the figure without it.
+    housing_benefit: [3_308.20, 0]
     council_tax_benefit: [1_097.91, 0]
 
 - name: A qualifying-benefit resident in another benefit unit can still be the pensioner's paid carer