The Department for Works and Pensions has announced changes to pension credit rules.
The new rules mean pensioners with younger spouses or partners, not of pensionable age, will no longer be able to claim pension credit. It will not affect those already claiming.
Pension credit rules to change in May 2019
On January 14, pensions minister Guy Opperman announced that new pensioners whose partners are younger than the state retirement age of 65 can no longer claim pension credit.
He released a ministerial statement saying:
“Pension credit is designed to provide long-term support for pensioner households who are no longer economically active. It is not designed to support working age claimants.”
The new rules are due to be introduced on 15th May. From May pension age partners will be forced to claim working-age benefits alongside their younger partners.
At the moment, when single people reach state pension age, they move from working-age benefits to pension age benefits.
So far, couples have been able to choose to move to pension age credits. When the older partner reaches pension age. The new rules take this option away.
‘From May Pensioners who live together as a couple will only be able to make a new claim for pension credit when both partners are over the state pension age.’
Age UK said this could affect the poorest pensioners the hardest. With mixed-age couples potentially losing out on about £7,000 per year.
Pension credit gives a guaranteed minimum income.
Designed to guarantee a minimum income. Pension credit is available for people over state pension age. This is now 65 for both men and women.
For someone over 65 living in a couple, they can claim pension credit regardless of their partner’s age.
From 15 May 2019, however, those in couples will only be able to begin claiming if both partners are over 65.
Guarantee credit can be claimed if your weekly income is less than £163 for a single pensioner. Or your joint weekly income is less than £248.80 as a couple. Pension credit will bring your income up to this level if it is lower.
“Changes were cynical and could lead to bad outcomes for retired people.”
Stephen Lloyd, independent MP for Eastbourne, said the changes were cynical. Retired people could have bad outcomes. He added that the announcement was timed to coincide with when attention was focused on Brexit.
“I think it tells us a lot about how this government believes the news would be received by retired people up and down the country. That they snuck their announcement out at 7:20 pm on Monday evening. Just when most of Westminster is fixated with Brexit.”
“I have written to the pensions minister seeking urgent clarification. The cack-handed government must not be allowed to bury bad news. By surreptitiously releasing it when the bedlam caused by their own Brexit incompetence is at its height.”
“Make no mistake, this is very bad news for everyone affected.”
Caroline Abrahams, charity director at Age UK, said:
“Make no mistake, this is very bad news for everyone affected. It’s a substantial stealth cut. A couple claiming in the future could receive £140 less per week than an older mixed couple claiming before the change comes in.”
Age UK said that in theory, the change will not affect existing claimants. However, if a mixed-age couple temporarily loses their eligibility for pension credit, then from 15 May they will be unable to regain it. They will be put onto the universal credit regime.
It said the change effectively meant many pensioners might find themselves financially better off if they split up. Living apart from their partner.
The charity said:
“This is because once the change is implemented, the pensioner partner will, in many cases, actually be eligible for more money from their pension credit than they and their partner will get together from universal credit.”
The chair of Work and pensions select committee, Frank Field, MP for Birkenhead since 1979, has written to the secretary of state for work and pensions Amber Rudd seeking clarity on changes made to pension credit.
He expressed ‘concern’ that the amendment could ‘see some couples lose a substantial proportion of their income.’
Couples will now need to claim universal credit instead of pension credit, as a result of the change.
What to do if you don’t already claim.
If you don’t already claim. [And[ are over 65 or will be before 14 May. You have a younger partner and meet the income criteria. Make sure you apply as soon as possible.
The official deadline is 14 May 2019. Though in practice you have until 13 August 2019 to apply. As you can backdate a claim by up to three months.
50,000 pensioners with younger partners could claim currently but don’t. According to estimates. So, if you’re eligible, apply as soon as possible.