Pension credit is changing - here’s everything you need to know

Rules around pension credit are changing (Photo: Shutterstock)Rules around pension credit are changing (Photo: Shutterstock)
Rules around pension credit are changing (Photo: Shutterstock)

Pension credit is an essential benefit for older people who are struggling financially, however changes are being made which could make some individuals ineligible.

The Department for Work and Pensions (DWP) is making significant changes to pension credit which could mean that pensioners with younger partners can no longer receive the money.

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It could leave some couples as much as £140 per week worse off.

What is pension credit?

Pension credit is a benefit that tops up the incomes of people who have reached the qualifying age in order to ensure they have a minimum amount to live on. Under the changes, that age will be in line with increased state pension age.

Age UK says that pension credit claimants are unlikely to have to have to pay council tax. They could get free NHS dental treatment and a cold weather payment.

Those who rent their homes may also have their rent covered by housing benefit while home owners could receive support for their mortgage interest, ground rent and service charge.

It can also mean that carers receive extra help.

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How much is the benefit worth?

Pension credit is made up of guarantee credit and savings credit.

The guarantee credit is what tops up your income. For a single person, income is topped up to the £167.25 per week minimum, and for couples the level is set at £255.25.

Savings credit is extra money that can be given to people who have saved up towards their retirement. This can only be claimed if the claimant reached state pension age before April 2016.

For a single person, this is £13.72 per week, and for a couple it is £15.35.

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What is changing?

Until now, pension credit has been available to couples on the basis that one partner has reached the pension qualifying age.

However, from May 15, this will no longer be the case. Both partners need to have reached the qualifying age before the benefit can be claimed.

This means that so-called ‘mixed-age’ couples who wish to start claiming the benefit will not be able to do so. Instead, mixed-age couples will have to claim universal credit, which is worth less.

Some couples could be as much as £7,000 a year worse off as a result of the reform. It is thought that 40,000 couples will be affected.

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Mixed-age couples who already claim the benefit will not be affected

Claims can be backdated for couples who were eligible for pension credit on 14 May or before. Couples will need to apply by 13 August 2019 in this case.

Mixed-age couples who already claim pension credit will not be affected after the reform unless there is a change in circumstance. For example, if they stop claiming Pension Credit, they will not be able to access it again until both are over the correct qualifying age.

Check you are eligible

Age UK is urging couples to check if they are eligible before the changes come into play on May 15, so that they can start claiming before it is too late.

You can check if you are entitled to the benefit using this tool.

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The government has been accused of bringing the changes to pension credit in on the sly.

Labour MP Stephen Timms slammed the government for bringing in the new rules without saying anything or including it in the budget.

A campaign has been launched by i to raise awareness of this issue.

This article originally appeared on our sister site, The Scotsman