Please be aware of the important changes to Pension Credit coming into force on the 15th May 2019
Changes to Pension Credit
Pension Credit is a tax-free weekly payment which provides older people with a minimum level of income and supports those on a modest income who have made savings for their retirement.
Therefore, it tops up your income. It is paid in two parts and it is possible to receive both:
- Guarantee Credit (for people over the female State Pension Age)
- Savings Credit (for people over 65 years of age)
You can get both Guarantee Credit and Savings Credit or either individually, depending on your circumstances.
How do I qualify for Pension Credit?
- Age restrictions as above although for a couple only one of you has to be over this age
- You must have income (including capital) below a certain level
- You must be habitually resident in the UK
- You must not be subject to immigration control
PLEASE NOTE FROM MAY 15 2019 THIS WILL NO LONGER BE THE CASE
Thousands UK pensioners who have partners of working age could lose up to £7,000 a year in top-ups as a result of changes that will require them to claim universal credit as a couple.
Changes made by the Department for Work and Pensions mean that from 15 May 2019, new pensioners whose partners are younger than the state retirement age of 65 can no longer claim the means-tested top-up called pension credit.
Instead they will be forced to claim universal credit alongside their younger partners.
This means that From 15 May 2019,
- pensioners will no longer be able to apply for Pension Credit if their partner is of working age.
- They will now need to apply for and claim Universal Credit instead until their partner reaches State Pension age
The couple rate of universal credit is £114.81 a week.
The couple rate for pension credit is £255.25 for a couple receiving pension credit. This amounts to a potential loss of £7,320 a year.
‘Age UK described the change as a “substantial stealth cut” and said it could have a devastating effect on the health and wellbeing of some older people and increase the numbers of pensioners in poverty’.
The average age gap for mixed-age couples is 2.6 years, meaning the cash loss incurred before the younger partner becomes old enough to claim pension credit could be £19,000. Where the gap is greater the potential total lost will be more.
Age UK also add that pensioners may find themselves in the “absurd position” of being financially better off if they split up and live apart from their partner.
A single person who claims the top-up is eligible for £167.25 a week in pension credit, meaning that in theory a pensioner will be better off staying “solo” for benefit purposes rather than claiming with a partner.
Currently, people who reach retirement age and are eligible can claim pension credit regardless of the age of their partner. In future they will have to wait until their partner also reaches 65, although the state retirement age will be increased to 66 from October 2020.
Couples with one partner under state pension age who are already in receipt of pension credit will be unaffected. But they will be moved to the new system if their circumstances change, such as a change of address, or even if the pensioner partner goes abroad for longer than a month.
If a mixed-age couple claim universal credit, the pensioner partner will not be required to look for work as a condition, unlike working-age claimants. The government says the younger partner’s claimant conditions will be tailored to meet the couple’s circumstances.
Who will be affected?
Any couples where the oldest partner reaches State Pension age who have an income below £248.80 a week will be affected.
Mixed age couples with a partner under State Pension age already getting Pension Credit or pension-age Housing Benefit won’t be affected while they remain entitled to either benefit.
Any couples eligible for Pension Credit where only one partner has reached State Pension age should apply for the benefit now before the new rules come into force on 15 May 2019. They will be able to remain on Pension Credit unless they have a change in circumstances affecting their claim.
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Info: Rights for seniors/Turn to us