Age UK urges people to claim Pension Credit and Housing Benefit now
Published on 27 February 2019 12:00 AM
Charity calls on all pensioners with a low income and a non-pensioner partner to put in a claim or risk missing out on up to £7,000 a year
Age UK is calling on all pensioners living on a low income with a partner of working age to urgently check their eligibility for Pension Credit[i] and Housing Benefit[ii] and put in a claim before the Government changes the rules on 15th May.[iii]
The change, sneaked out the evening before the ‘meaningful vote’ on Brexit, will see the right to claim Pension Credit and Housing Benefit – important tools in the fight against pensioner poverty – withdrawn from future claimants who happen to have a partner who hasn’t yet reached their own pensionable age, with potentially devastating consequences for all those affected.
Age UK is urging anyone who may be entitled to claim benefits to call Age UK Advice free of charge on 0800 169 65 65, visit www.ageuk.org.uk/money or contact their local Age UK for further information and advice.
The Charity is warning that by slashing the benefits that couples needing to claim benefits in the future by as much as £7,000 a year,[iv] the new policy will place some pensioners in the absurd position of being financially better off if they split up and live apart from their younger partner. This is because once the change is implemented, the older partner could be eligible for significantly more money by claiming Pension Credit as a single person than if the pair of them claim Universal Credit as a couple.
Although in theory this change will not impact on existing claimants the Charity is warning that if a so-called ‘mixed-age couple’ temporarily loses their eligibility for these benefits because of a change in their personal or financial circumstances, from May they will be unable to regain it and will be thrown back onto the Universal Credit regime, the problems of which are well documented.
Over recent years the means-tested benefit systems for pensioners and people of working age have been growing further apart. Some of the main differences are:
- The amount you receive: The standard rate of Pension Credit guarantee is paid at a higher level than the standard rate of Universal Credit and this gap has widened. Over recent years Pension Credit guarantee has been uprated, at least in line with earnings, while working age benefit levels have been frozen or increases restricted.
- How any earnings are treated: For Pension Credit, usually just £5 a week (£10 for a couple) of earnings from work are ignored after which earnings reduce payments £1 for £1. Under Universal Credit, earnings reduce benefit by a 63% taper. So, for example, if earnings rise by £100 a month, benefit reduces by £63.
Caroline Abrahams, Charity Director at Age UK, said:
“It’s not at all unusual for one partner to be older than the other so lots of older couples on low incomes could be affected by this policy change, even though many of them may not know it yet.
“That’s why we’re urging any pensioner who thinks there is even the slightest chance that they could be entitled to Pension Credit and/or Housing Benefit to put in a claim now rather than wait until May – it could give them as much as £7,000 more to spend a every year until the younger partner becomes a pensioner.
“We are really worried that this mean-spirited policy change, which came out very quietly in an apparent effort to bury bad news, will devastate the incomes of some of our least well off older people. We also know that these particular couples include some where the younger partner is caring for the older one, who in the future could face much greater financial pressures because they will have to rely on working age benefits – flying in the face of the Government’s declared policy of supporting families to care. For this and other reasons we are urging the Government to reverse its decision and keep things as they are.”
Any older person who is worried about money or thinks they may be entitled to claim Pension Credit or other pensioner benefits can call Age UK Advice free of charge on 0800 169 6565, visit www.ageuk.org.uk or contact their local Age UK for further information and advice.
Notes to editors:
1. Many older people are missing out on the benefits they are entitled to. Nationally it is estimated that 50% (360,000) couples entitled to Pension Credit are not receiving it. Among single pensioners, 37% (840,000) who should be receiving Pension Credit have not claimed. (Income-related benefits: estimates of take-up 2016/17), DWP published 2018).
2. Case study
Mixed-age couples – the impact of changes for a hypothetical couple
Peter, aged 70, draws a State Pension of £140 a week. His wife Jean, aged 62 gave up work five years ago to care for her father who has recently died. They own their home and have a few hundred pounds in savings. They receive Pension Credit to top up their joint income to £248.80 a week (the standard rate of Pension Credit for a couple rising to £255.25 from April 2019).
After the rules change….
Peter and Jean’s position will be protected if they are still receiving Pension Credit when any changes come in - as long as their circumstances stay the same.
However, a couple in this situation who need to claim benefits for the first time after 15 May 2019 would not be entitled to Pension Credit due to Jean’s age. Peter’s State Pension is too high for them to receive Universal Credit (currently £498.89 a month, around £115 a week, and not due to change in April 2019).
So, their total joint income will just be Peter’s State Pension (around £143.50 a week from April 2019). If Jean cannot find a job, which may be difficult given her age and time out of the labour market for caring, this will be their income for another 4 years until Jean reaches SPA at age 66. By this time Peter will be 74.
If Peter was single…..
However, if Peter was living on his own, because they separate, or Jean dies, he would be able to claim Pension Credit in which case his State Pension will be topped up to £163.00 a week (£167.25 from May 2019) – considerably more than the Universal Credit standard rate for a couple of about £115 a week.
[i] Pension Credit is an income-related benefit to give you some extra money in retirement: https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/pension-credit/
[ii] If you’re struggling to cover your rent then you could claim Housing Benefit to help with your housing costs: https://www.ageuk.org.uk/information-advice/money-legal/benefits-entitlements/housing-benefit/
[iii] The change is due to come into effect from 15th May, 2019. However, there is provision for backdating so as long as makes a claim by 13 August the claim can be backdated to 14th May as long as they met all the rules and were entitled on that date.
[iv] This is the difference between standard UC and standard PC for couples. From April 2019, the rates will be:
Pension Credit (for a couple) - £255.25 per week
Universal Credit (for a couple) – approx. £115 per week (£498.89 per calendar month)
We work with our national partners, Age Scotland, Age Cymru and Age NI and our local Age UK partners in England (together the Age UK Family). We also work internationally for people in later life as a member of the DEC and with our sister charity Help Age International.
Age UK believes that everyone should have the opportunity to make the most of later life, whatever their circumstances. We provide free information, advice and support to over six million people; commercial products and services to over one million customers; and research and campaign on the issues that matter to people in later life. Our work focuses on five key areas: money matters, health and well-being, home and care, work and training and leisure and lifestyle.
Age UK is a charitable company limited by guarantee and registered in England (registered charity number 1128267 and company number 6825798). Age Concern England and Help the Aged (both registered charities), and their trading and other associated companies merged on the 1st April 2009. Together they have formed the Age UK Group ("we"). Charitable services are offered through Age UK and commercial products are offered by the Charity's trading companies, which donate their net profits to Age UK (the Charity).