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HMRC internal manual

Employment Income Manual

Social security benefits: benefits when in hospital

Social security benefits may be reduced or stopped when the claimant is in hospital. Where this happens the taxable amount is the lower revised amount of benefit to which the recipient is entitled.

For example, until 20 May 2003 if a retirement pensioner who does not live in a local council home or similar place, goes into hospital, his or her pension was reduced after six weeks. Then if the person stays in hospital for one year the State pension will be reduced by a further amount.

With effect from 21 May 2003 this has now changed. For a pensioner entering hospital for the first time from 9 April 2003, the retirement pension will not be reduced until his or her stay in hospital has lasted 52 weeks. For any pensioner who is in hospital on 21 May 2003 whose retirement pension has been reduced, the pension will be restored to the full amount for payments falling due after 21 May 2003, subject to the 52-week limit.

Similarly where a retirement pensioner gets extra pension for his or her spouse or civil partner as an adult dependent (see EIM74602) and that spouse or civil partner goes into hospital, the dependency addition to the pension is reduced after one year.

Leaflet GL12 ‘Going into hospital?’ explains more about this subject. Taxpayers can get a copy from their local DWP office.