What is Pension Credit and how do I claim it?

What is Pension Credit and how do I claim it?

A nation’s greatness is measured by the way it treats its vulnerable members, so the saying goes. Judging by the way the Department for Work and Pensions (DWP) plans to treat new pensioners in mixed-aged relationships from 15 May 2019, the evidence suggests that the UK is failing to achieve this pre-eminence.

From 15 May, where one half of a couple reaches state pension age and their partner is of working age, that couple will no longer be entitled to claim Pension Credit and pension age Housing Benefit, worth up to £13,273 a year. They will be forced to claim the less generous Universal Credit, worth around £5,986 a year, until the younger partner reaches state pension age.

The rule change, which comes into force with less than six months notice, will lead to a £7,000 loss in annual income and could leave these couples facing a heartbreaking dilemma: split up and claim Pension Credit or Universal Credit separately, or stay together and try to survive on less than half their planned income.

A DWP analysis shows that over the next five years, 60,000 of the UK’s poorest pensioners in mixed-aged relationships will have to think seriously about separating as a result of the reform to Pension Credit. But given the scarcity of affordable housing, many couples won’t have this option at their disposal but will instead be pitched into abject poverty.

It has been suggested that people approaching state retirement age should carry on working after the deadline. This could be a sensible solution for those people who enjoy their work, if the work is available. But it offers little solace to those whose ill health prevents them from working, especially if one half of a couple has been providing care to the other because of a long-term health condition.

One good thing to emerge over the last few months is the DWP’s decision to scrap the humiliating reviews that disabled pensioners have to endure just to receive their Personal Independent Payment (PIP), a benefit many contributed towards when they were working.

But as disability rights campaigners have rightly pointed out, the DWP will need to extend its new, “light touch” review regime to all PIP recipients if it wishes to be seen as truly compassionate and if it hopes to stem the rising tide of physical and mental ill health among claimants.

What is Pension Credit?

Pension Credit is an income-related benefit which tops-up the weekly incomes of the UK’s pensioners to a minimum level. It was introduced in 2003 by Gordon Brown, then the Chancellor of the Exchequer, to lift some of the UK’s poorest pensioners out of poverty. It is made up of two components: Guarantee Credit and Savings Credit.

From 6 April 2019, Guarantee Credit will top-up the weekly income of a single person to £167.25 and to £255.25 for couples who have both reached state pension age. Savings Credit is available to people who reached state pension age before 6 April 2016 who have some savings. From April 2019, it will pay £13.72 per week for a single person and £15.35 per week for couples.

Around a third of pensioner households who are entitled to Pension Credit don’t claim it, according to DWP data. If this relates to you, you should claim it now. Your application can be backdated by three months. You will need your National Insurance number, bank account details, information about your income, pension, housing costs, savings and investments.

For more details, visit www.ageuk.org.uk or call the Age UK Advice Line free on 0800 055 6112 or 0800 678 1602. The Pension Credit Claim line can be reached by calling 0800 99 1234.