In February we reported on the changes to Pension Credit and Housing Benefit that were announced in connection with the continued roll out of Universal Credit (MT Feb 2019 Issue 317). Pension Credit is an income-related benefit to give you some extra money in retirement, and if you’re struggling to cover your rent, you could claim Housing Benefit to help with your housing costs: both important tools in the fight against pensioner poverty.
The changes to both of these benefits will see the right to claim them withdrawn from future claimants who happen to have a partner who hasn’t yet reached their own pensionable age, with potentially devastating consequences for all those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 calling on all pensioners living on a low income with a partner of working age to urgently check their eligibility for Pension Credit and Housing Benefit and to put in a claim before the Government changes the rules on 15th May this year, or risk missing out on up to £7,000 a year.
The charity is warning that the new policy could 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 Age UK 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.
Age UK state that 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.