Who can claim Pension Credit?
At the moment you can claim Pension Credit as soon as you reach the pension age for a woman. These dates are available from the Age UK website
If you are in a couple you can claim Pension Credit as soon as the oldest member of the couple reaches this age. If you are eligible for Pension Credit it is important to claim this even if it is only a small amount each week. If you get Pension Credit you will also be entitled to other help as well:
- you don’t usually have to pay Council Tax,
- you get maximum Housing Benefit,
- you get free NHS dental treatment and help with the costs of glasses and fares to hospital
- You get a Cold Weather Payment of £25 when the temperature is at 0°C or below for 7 days
- You may get help with mortgage payments and ground rent if you own your own home
- If you are a carer or if you live alone and get Attendance Allowance or Personal Independence Payment daily living component or middle or higher rate care component of Disability Living Allowance you may be eligible for additional amounts of Pension Credit.
Changes to the age at which you can claim Pension Credit
The current rules are due to change with effect from 15th May 2019. From this date both members of the couple will need to be over pension age in order to qualify for Pension Credit. This means that couples where one member was born on or before the 5th February 1954 can gain protection from these new rules by claiming Pension Credit before this date. People who are eligible to clam Pension Credit before 15th May will be able to do a late claim for Pension Credit for up to 3 months after this date to avoid the need to claim Universal Credit. You will also be able to do late claims for Housing Benefit if you are on Pension Credit before 15.5.2019 and vice versa.
If you fail to claim in time you will be prevented from claiming Pension Credit until both members of the couple are over Pension Credit age.
This will mean that some couples have to wait many more years before they can claim Pension Credit and so will lose large sums of money as a result. These sums will be around £7,000 per year that they are prevented form moving on to Pension Credit. If you claim Pension Credit before the change to the age rules, you will remain on Pension Credit and will not need to claim Universal Credit. It is important that all couples with one person over Pension Credit age checks whether they have an entitlement to Pension Credit.
This change will have a huge impact – particularly on the amount of benefit older couples will receive and also on the conditionality that the younger partner (usually a woman) will face in order to qualify for Universal Credit.
NOTE: if a couple is already in receipt of Pension Credit and there is no change in circumstances then they will continue to receive Pension Credit even if they are a mixed aged couple – if they are both over pension credit age then, again, they will continue to receive Pension Credit.
If the mixed age couple are in receipt of (pension age) Housing Benefit, even if there is no Pension Credit payable at present, they will also be protected. (see example below)
Fred and Jenny are a married couple aged 67 and 57. Fred has retired and receives his state retirement pension and Jenny works part time.
Their income is too high to be entitled to Pension Credit but when Fred seeks advice at his local Law Centre he is delighted to hear that he may be entitled to a small amount of Housing Benefit.
He claims and receives £12.50 a week towards the rent.
Jenny continues working but decides to stop in September 2019 – and as the couple have been in receipt of (pension age) Housing Benefit with Fred as the main claimant, this will protect them and allow them to claim Pension Credit as the top up to Fred’s state pension and not Universal Credit.
If Fred had not sought advice then Jenny would have had to claim UC and, due to the lower amounts of benefit, the couple may not have been eligible at all but would certainly not receive the same assistance that they would on Pension Credit – and Jenny would have had increased conditionality.
Losing the mixed age couples protection
When mixed age couples have claimed Pension Credit or Housing Benefit before the deadline of 15th May 2019 this protection can be lost if a change in circumstances means that the entitlement to Pension Credit or Housing Benefit is lost.
- A single claimant aged 68 in receipt of Pension Credit forms a relationship with a younger partner – their PC would cease and depending on the couples’ circumstances the younger member may have to claim UC for the couple
- A couple aged 71 and 62 are in receipt of PC – they choose to go abroad to attend a family wedding in Bangladesh, planning to return within the 4 weeks allowed. However, whilst they are there, a relative dies suddenly and they stay beyond the 4 weeks allowed. On their return they discover that their PC (and if renting their HB) will cease and the younger member of the couple must now claim UC for the couple
- A couple aged 67 and 61 are in receipt of PC. The 67 year old is given the opportunity to take on a 6 month employment contract which he does and their PC stops. When the 6 months ends the contract is not renewed and the couple try and reclaim PC – this is now not possible (unless any HB has been received during the work period (see above example). The younger member of the couple will now have to claim UC until they both reach state pension age in 6 years.
Other potential financial impact
At present other Welfare Reforms such as the Bedroom Tax and the Benefit Cap do not affect pensioners – however, if the younger member of the couple has to make a claim for Universal Credit, the couple will now be treated as “of working age” – this will mean that they will be subject to both the Bedroom Tax and the Benefit Cap, with the Bedroom Tax meaning that up to 25% of the housing costs may be lost – they will also be treated as of working age for local Council Tax Support schemes meaning that they may have to make a contribution to their council tax bill.
What could the impact be financially on a mixed age couple?
Please see below an examples of the financial impact on a couple who may be affected by this change –
We are assuming for ease of explanation that this is just pure Pension Credit entitlement – you will often find that one or both members of the couple may be getting other income (such as a state pension or a private/occupational pension for example)
Example of a couple at present (either both over Pension Credit age or one over PC age and one under) without any disabilities
- Pension Credit Personal Allowance (couple)
£248.80 a week (equivalent of £1,078.13 a month) (Housing Benefit and Council Tax support paid in addition)
Universal Credit as a mixed age couple
£498.89 a month (plus any housing costs and council tax support paid in addition)
This equates to approximately £115.13 a week
NOTE: a single claimant on PC receives £163.00 a week (£706.33 a month) which is more than a couple will receive on UC! This could lead to a couple potentially separating as they would be financially better off.
What can advisers do?
Advisers have very little time to try and remedy this – we need to try and identify mixed aged couples who are not at present claiming either Pension Credit or pension age Housing Benefit – and try and encourage them to make a claim – it is thought that on even the basic benefit, without any disability addition, a couple in this situation could lose up to £7,000 per annum.
Central England Law Centre are engaged with Birmingham and Coventry Councils to try and encourage them to identify claimants through the HB data and to see if they would be entitled to claim PC – organisations such as housing associations or those working with older people are also looking at take up campaigns – we need to ensure that in the next 2 months we get as many older people in this situation to claim PC or (pension age) Housing Benefit and warn them of what may happen if there is a change of circumstance.
Other changes to Pension Credit
There will be other future changes to Pension Credit as a result of the introduction of Universal Credit as other benefits such as Tax Credits and Housing Benefit are phased out. These benefits will all eventually become part of Universal Credit and when this happens it will mean that pensioners who currently get Housing Benefit will instead have this replaced by a new housing credit which will be paid as part of Pension Credit although it should be possible to get the housing credit without also getting Pension Credit.
If pensioners are claiming for children they will also no longer be eligible for Child Tax Credit and instead additions for children will be payable as part of their Pension Credit. Older people who are working will also transfer from Working Tax Credit to additions paid on Pension Credit.
The full details of these changes are not known as yet. We will give more information about this here when this is available.