Add the savings-credit-only HB regression case (#1945) and the CTR corporate_wealth note (#1909)

changelog.d/followups-1909-1945.changed.md

@@ -0,0 +1 @@
+- Note that the council tax reduction (CTR) capital-route loss in #1909 is an artefact of the `corporate_wealth` proxy, so CTR offsets in pension costings that rest on it should not be read as real effects. A pensioner whose Pension Credit award is savings credit only is tested against the CTR capital limit on Pension Credit's capital (`council_tax_reduction_assessable_capital`), and Pension Credit's capital sources count `corporate_wealth` but not `private_pension_wealth`. In datasets built before the `private_pension_wealth` split, `corporate_wealth` also holds imputed pension wealth, which Pension Credit disregards (State Pension Credit Regulations 2002 Sch V paras 22 and 23), so these pensioners can fail the £16,000 limit on pension wealth that is not countable capital. A benefit unit that records `pension_credit_reported_capital` bypasses the proxy. See #1837 and #1936. Two CTR test cases pin the route, and a new Housing Benefit case pins the savings-credit-only route of #1945 for a household built from age, pensions, rent, tenure and capital alone.

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

@@ -25,12 +25,13 @@
 # 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.
+# Robustness to the other Housing Benefit fixes: the tenants rent from the
+# council, so the Local Housing Allowance order cannot apply; cases 1 to 8
+# set housing_benefit_applicable_income_disregard to the value the earnings
+# disregard fix (PolicyEngine/policyengine-uk#1908, merged) gives, 0 for a
+# family with no earnings, and case 9 leaves it to the model; 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
@@ -325,3 +326,78 @@
     # 12,914, below the applicable amount of 13,312.
     housing_benefit_applicable_income: 12_914
     housing_benefit: 7_800
+
+- name: Case 9, savings credit only, no earnings, built from age, pensions, rent, tenure and capital alone, with nothing overridden.
+  period: 2026
+  absolute_error_margin: 0.01
+  # A regression guard for the integrated route (reviewer request on #1945, 1
+  # and 5 October 2026). The inputs are only age, pensions, rent, tenure and
+  # savings: no Housing Benefit disregard, no childcare, and no Pension Credit
+  # or Housing Benefit income intermediate is set, so every figure below is
+  # the model's own. Cases 1 to 8 set the earnings disregard directly.
+  #
+  # Law, SI 2006/214 reg 27 (NI: SR 2006/406 reg 25), read on
+  # legislation.gov.uk on 5 October 2026: (1) the authority uses the Secretary
+  # of State's calculation of income and capital for the savings-credit-only
+  # award; (4) it modifies the net income "only in so far as necessary to take
+  # into account" (a) the savings credit payable, (b) childcare charges, (c)
+  # and (d) the higher earnings and additional disregards, (e) to (g) items
+  # outside this household; (5) its own income rules, tariff income included,
+  # do not apply to the Secretary of State's figure; (6) capital is the
+  # Secretary of State's, with the £16,000 limit applied to it.
+  #
+  # 2026 parameters, as in the cases above: minimum guarantee £238.00 a week
+  # single (12,376 a year); savings credit threshold £208.07 (10,819.64),
+  # phase-in 60% and withdrawal 40%; Housing Benefit aged personal allowance
+  # £256.00 (13,312); taper 65%; personal allowance 12,570 and basic rate 20%.
+  input:
+    people:
+      person1:
+        age: 83
+        state_pension: 10_200
+        private_pension_income: 3_100
+    benunits:
+      benunit:
+        members: [person1]
+    households:
+      household:
+        members: [person1]
+        rent: 6_240
+        tenure_type: RENT_FROM_COUNCIL
+        savings: 13_900
+  output:
+    # (10,200 + 3,100 - 12,570) x 0.2 = 730 x 0.2 = 146.
+    income_tax: 146
+    # (13,900 - 10,000) / 500 = 7.8, so 8 steps of £1 a week; 8 x 52 = 416.
+    pension_credit_assessable_capital: 13_900
+    pension_credit_deemed_income: 416
+    # The Secretary of State's net income: 13,300 - 146 + 416 = 13,570. Above
+    # the minimum guarantee of 12,376, so no guarantee credit.
+    pension_credit_income: 13_570
+    guarantee_credit: 0
+    # Savings credit payable: the maximum is 0.6 x (12,376 - 10,819.64) =
+    # 933.816, below 0.6 x (13,570 - 10,819.64) = 1,650.216, so it is the
+    # maximum; less 0.4 x (13,570 - 12,376) = 477.60; 933.816 - 477.60 =
+    # 456.216.
+    savings_credit: 456.22
+    pension_credit: 456.22
+    in_receipt_of_savings_credit_only: true
+    # The reg 27(4) modification to the net income of 13,570: (a) adds the
+    # savings credit payable, 456.216. There is no (b) childcare, and with no
+    # earnings no (c) or (d) disregard, so the modification is +456.216.
+    housing_benefit_applicable_income_childcare_element: 0
+    housing_benefit_applicable_income_disregard: 0
+    # 13,570 + 456.216 - 0 - 0 = 14,026.216. Without (a) it would be 13,570.
+    housing_benefit_savings_credit_only_income: 14_026.22
+    # Reg 27(5): no Housing Benefit tariff income on top of the deemed income
+    # inside the 13,570.
+    housing_benefit_tariff_income: 0
+    housing_benefit_applicable_income: 14_026.22
+    housing_benefit_applicable_amount: 13_312
+    # Reg 27(6): the Secretary of State's capital, 13,900, within the limit.
+    housing_benefit_assessable_capital: 13_900
+    housing_benefit_eligible: true
+    # 6,240 - 0.65 x (14,026.216 - 13,312) = 6,240 - 0.65 x 714.216 =
+    # 6,240 - 464.2404 = 5,775.7596. Without (a), 6,240 - 0.65 x (13,570 -
+    # 13,312) = 6,240 - 167.70 = 6,072.30.
+    housing_benefit: 5_775.76

policyengine_uk/tests/policy/baseline/gov/local_authorities/council_tax_reduction/council_tax_reduction_pension_credit.yaml

@@ -616,3 +616,91 @@
     in_receipt_of_savings_credit_only: true
     council_tax_reduction_assessable_capital: 16_000.01
     council_tax_reduction: 0
+
+# The next two cases pin the route behind the capital-route loss of #1909, so
+# that the loss is not read as a real effect (see also #1837 and #1936). A
+# savings-credit-only recipient is tested against the CTR capital limit on the
+# Pension Credit figure, and Pension Credit's capital sources count
+# `corporate_wealth` but not `private_pension_wealth`: State Pension Credit
+# Regulations 2002 Sch V paras 22 and 23 disregard the value of a right to
+# receive income from an occupational or personal pension scheme or under a
+# retirement annuity contract. In datasets built before the
+# `private_pension_wealth` split, `corporate_wealth` also holds imputed pension
+# wealth, so there the first case's exclusion rests on pension wealth that
+# Pension Credit does not count. The rule in the first case counts
+# `corporate_wealth` whatever it holds, and stays as written once a dataset
+# splits the column; what changes is the value the dataset gives
+# `corporate_wealth`.
+
+- name: Savings credit only, corporate_wealth counts as Pension Credit capital, so a pensioner with nil household savings is over the CTR capital limit
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      pensioner:
+        age: 90
+        state_pension: 12_000
+        private_pension_income: 1_500
+    benunits:
+      benunit:
+        members: [pensioner]
+        claims_all_entitled_benefits: true
+    households:
+      household:
+        members: [pensioner]
+        country: ENGLAND
+        local_authority: MAIDSTONE
+        tenure_type: OWNED_OUTRIGHT
+        council_tax: 2_000
+        savings: 0
+        corporate_wealth: 20_000
+  output:
+    # (12,000 + 1,500 - 12,570) x 0.2 = 186. (20,000 - 10,000) / 500 = 20
+    # steps of £1 a week; 20 x 52 = 1,040 of deemed income.
+    pension_credit_assessable_capital: 20_000
+    pension_credit_deemed_income: 1_040
+    # 13,500 - 186 + 1,040 = 14,354, above the minimum guarantee of 12,376.
+    pension_credit_income: 14_354
+    guarantee_credit: 0
+    # 933.816 - 0.4 x (14,354 - 12,376) = 933.816 - 791.20 = 142.616.
+    savings_credit: 142.62
+    in_receipt_of_savings_credit_only: true
+    # The Pension Credit capital is 20,000, over 16,000, with nil savings in
+    # the household. The same pensioner with 20,000 of private_pension_wealth
+    # keeps CTR in the next case.
+    council_tax_reduction_assessable_capital: 20_000
+    council_tax_reduction: 0
+
+- name: Savings credit only, private_pension_wealth is not Pension Credit capital, so it does not take the pensioner over the CTR capital limit
+  period: 2026
+  absolute_error_margin: 0.01
+  input:
+    people:
+      pensioner:
+        age: 90
+        state_pension: 12_000
+        private_pension_income: 1_500
+    benunits:
+      benunit:
+        members: [pensioner]
+        claims_all_entitled_benefits: true
+    households:
+      household:
+        members: [pensioner]
+        country: ENGLAND
+        local_authority: MAIDSTONE
+        tenure_type: OWNED_OUTRIGHT
+        council_tax: 2_000
+        savings: 0
+        private_pension_wealth: 20_000
+  output:
+    # No capital counts, so no deemed income: as with no wealth at all,
+    # 13,500 - 186 = 13,314 and 933.816 - 0.4 x (13,314 - 12,376) = 558.616.
+    pension_credit_assessable_capital: 0
+    pension_credit_deemed_income: 0
+    pension_credit_income: 13_314
+    savings_credit: 558.62
+    in_receipt_of_savings_credit_only: true
+    council_tax_reduction_assessable_capital: 0
+    # 2,000 - 0.2 x (13,314 + 558.616 - 13,312) = 2,000 - 112.1232 = 1,887.8768.
+    council_tax_reduction: 1_887.88