Does anyone understand GIP?

[ivrytwr3]

Evening all,

I have been batting this question around with FPS, Veterans Agency, other forums and and in the tea bar! I have got so far, but still don't have a final answer reference GIP awards. Any GIP SME's amongst us here?

(GIP = Guaranteed Income Payment)

----------------------------

Projected salary at exit date is £37836, age will be 51.

The GIP factor for a service person of this age is 0.781.
£37836 x 0.781 = £29549.92.

In receipt of an award for an injury in tariff level 10, so GIP entitlement is 30% of this base figure. So GIP entitlement is £8864.97.

However, Immediate Pension is payable and currently calculated at £13392.

All above calculations have been confirmed as correct.

---------------------------

The official GIP blurb:

"If you are not medically discharged and are in receipt of an IP then GIP will be adjusted by 75% of this pension". So, £13392 / 75% = £10044,

Here is the question: What do you do with the GIP and IP figures? What is the actual figure payable because i am totally lost!

Thanks in advance.

[5 Forward 6 Back]

From what I understand, the GIP is reduced by the factored pension; so in this case, your person will just receive their £13 392 pension, and no GIP. However, to make things more complicated, as a GIP is tax free, I think an amount of the £13 392 IP equal to the GIP calculation will be paid tax free, if you see what I mean.

So £13 392 - £8 864.97 = £4 527.03, so £4 527.03 of the pension will be taxable income, the remaining £8 864.97 will be tax free.

Disclaimer; I looked a while ago for a colleague and never more than the gov.uk webpages, but that was my understanding!

[ivrytwr3]

That makes sense, if a little disappointing.

Thanks.

[Could be the last?]

The oracle for all things pension related tends to be AI R, however, the Pension society should be able to answer!

[ivrytwr3]

I've gathered all the info requested by the FPS, but unfortunately i still don't have an answer - i guess they are very busy with lots of disgruntled military type people!

[Al R]

GIP is not something I'm as well acquanted with as you deserve I'm afraid. Voxpop (FPS) is incredibly on the ball; if you PM, you'll definitely get a response. I know Voxpop is maxxed out at the moment, we have spent the week trying to catch up about something but always just miss each other through other commitments. Hope you get good news.