Age Gap Tax
The government has announced significant changes to the rules around claiming Pension Credit which will take effect from 15 May 2019. These changes will affect couples, whether married or simply living together, where one person is over the state retirement age and the other partner is younger. These are known as a mixed-age couple.
Pension Credit is an entitlement for people over State Pension age who have a low income and modest savings. It essentially “tops up” their State Pension to a minimum of £167.25 for a single person and £255.25 for a couple living together.
Pension Credit is already hugely underclaimed by those who would be eligible.
After 14 May 2019, a “mixed aged couple” (one person is of pensionable age and one younger than State Pension age), will no longer be able to claim Pension Credit unless they have already submitted a claim before that date.
To add insult to injury, Pension Credit is a ‘passporting benefit’. This means that it acts as a qualifying benefit for other forms of assistance, but as the couple won’t be able to claim Pension Credit until both are State Pension age, then they will miss out on passported benefits too.
These ‘passported benefits’ include Cold Weather Payments, maximum help with Housing Benefit, maximum help with Council Tax Reduction and help with health costs. Without Pension Credit people will not have access to claim Social Fund Funeral Payments and they may not be entitled to the warm home discount.
Changes to Pension Credit for ‘Mixed Age Couples’
In place of Pension Credit, the UK Government has decided that the younger partner in a “mixed age couple” should claim Universal Credit instead. The basic Pension Credit rate for a couple is currently £255.25 a week, and the basic Universal Credit rate for a couple is only £114.85 a week, which is less than the amount of Pension Credit for a single person. This could mean some couples could be worse off to the tune of £140.40 per week, or around £7,000 per year.
Age Scotland believes this move is deeply unjust and, together with our partners at Age UK, we have called on the decision to be reversed. However, the UK Government remains committed to this policy for the time being and we want to ensure that every older couple who is eligible to claim on or before 14 May does so.
How Age Scotland can help
Age Scotland’s free Helpline is on hand to provide support. Our helpline advisers can offer callers a free benefit and entitlements check to see if people are getting everything that they are entitled to and advise on how to claim Pension Credit.
Our Helpline is free to call and is available Monday to Friday 9am to 5pm on 0800 12 44 222.
Tell the Government to reverse their decision
Alongside our sister charity Age UK, we are urging the Government to stop this unfair targeting of mixed aged couples. Join us in telling them to reverse their decision.