Pensions on divorce and legal aid

I have read this on a law firm's website:

"If you obtain any financial advantage in legal proceedings, whether by winning or preserving any asset, and you have had the benefit of CLS Funding (Legal Aid) the Statutory Charge normally applies. This means that you must re-pay your state funded costs to the Legal Services Commission in full.
· Where the Statutory Charge applies, you could be liable to repay your legal costs from any and all applicable assets received or preserved in your proceedings.
However the Statutory Charge only applies to pension attachment Lump Sum and pension sharing Lump Sum Orders.
This means the Statutory Charge does not apply to: -
- Pension Attachment Periodical Payments Orders
- Pension Sharing Periodical Payment Orders."

What's
1] a Pension Sharing Lump Sum Order?

2] a Pension Sharing Periodical Payment Order?

ie how does CLS distinguish between the two?

Hi Maggie

I think you'll find that the difference relates to whether the pension is in payment or not.

A lump sum order will apply to pensions not in payment and a periodical payment order will apply to a pension in payment.

Is this sufficient or do you need more detail ?

Paul

Thanks - so if you share a pension in payment you don't get your share of the CEV as a lump sum that you can re-invest in a pension?
It will always come to you only as a ready made pension in payment - ie you can't defer taking your new pension into payment/decide not to buy an annuity?

If you get legal aid for your Ancillary Relief claim and then share a pension that's not in payment, the LCS can impose some sort of deferred charge on your pension with your pension scheme?

I don't do any legal aid work so I am mindful that I may just be muddying the waters here, but...
I assumed, reading the quote, that the difference was between whether the order resulted in a capital payment from a pension or an income stream from a pension, as the Statutory Charge applies to capital but not to income.
So, if you have legal aid and get a lump sum or property order, the legal aid charge can attach to that and they take what is owed for legal fees.
If however you don't get capital in any form but do get maintenance, the legal aid charge does not apply.
I assume the same principle applies here.
In any event, the charge can only attach to something if it means that the legal aid bods can get paid from it at some point in time.

Maggie,

I don't know the answer to the legal aid query, but from what Active8 has said, your assumption would seem to make sense, as a charge would be placed upon benefits which could be taken at some future point.

As far as a pension in payment is concerned, if an annuity has been purchased a sharing order involves redistribution of annuity benefits between the couple - you cannot have a lump sum and choose not to defer buying an annuity.

On the other hand, if it's an unsecured pension (commonly referred to as drawdown)where an annuity has not been purchased but benefits have been crystallised e.g. tax free cash has been taken and maybe income is being drawn from the fund, then the person receiving the share does not have to buy an annuity and can defer, subject to not being able to take any tax free cash in the future if the maximum has already been drawn.

I fear i'm moving away from your original question with the above, so i'll stop here !! Happy to add more though if you need more