North East Liberal Democrat MSP Mike Rumbles and Age Scotland are calling for all pensioners living on a low income with a partner of working age to check urgently their eligibility for Pension Credit and Housing Benefit before Government rule changes. After 15th May working age partners of pensioners will not be able to make a new claim for Pension Credit or Housing Benefit.
Without claiming households could be up to 7,000 per year worse off.
The change will not affect existing claimants. However, couples could temporarily lose their eligibility for Pension Credit and Housing Benefit due to changes in their personal or financial circumstances. From the 15th May, such a change would mean that couples would not be able to claim Pension Credit and Housing Benefit again and would be placed on Universal Credit instead.
Mr Rumbles said: “This is not the way we should be treating people who have worked hard all their lives. The new policy will place some pensioners in the absurd position of being financially better off if they split up and live apart from their partner who works.
“Anyone who thinks they might be entitled to Pension Credit or Housing Benefit should contact Age Scotland now. 7,000 less per year could have a devastating effect on a couple’s daily life.
“I welcome the work of Age Scotland to warn people about these changes. I urge the Scottish Government to look at the current problems in social security and build a wide consensus for the new system it plans to establish.”
Age Scotland’s Chief Executive Brian Sloan said: “These changes will have a devastating impact on the lives of some of the poorest pensioners in Scotland. Around one in six pensioners living in Scotland are in poverty and this retrograde move will do nothing to improve this.
“Beyond the Pension Credit support, these mixed age couples could also miss out on a range of ‘passported benefits’ such as housing benefit, council tax reduction, cold weather payments, support for dental and eyecare costs, perhaps even the warm home discount. All in, this could mean that the loss of financial support for those on the lowest income could be well over 7000 a year. That is wholly unacceptable and the UK Government must change course.
“It is vital that older people ensure that they claim everything they are entitled to. The Age Scotland Helpline offers free benefit and entitlement checks and can support older people with pension credit claims. Call 0800 12 44 222 before the 15th May for information and advice about these changes.”
Notes to editors:
After 15th May pensioners could be eligible for significantly more money by claiming Pension Credit as a single person than as a couple claiming Universal Credit. Mike Rumbles and Age Scotland urge anyone who may be entitled to claim benefits to call Age Scotland for a free benefit and entitlements check before 15th May. Age Scotland helpline: 0800 12 44 222.
Many older people are missing out on the benefits they are entitled to. Nationally it is estimated that 50% of couples entitled to Pension Credit are not receiving it. Among single pensioners, 37% who should be receiving Pension Credit have not claimed. (Income-related benefits: estimates of take-up 2016/17), DWP published 2018).
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.
Mixed-age couples – the impact of changes for a hypothetical couple
Peter, aged 70, draws a State Pension of 140 a week. His wife Jean, aged 62 gave up work five years ago to care for her father who has recently died. They own their home and have a few hundred pounds in savings. They receive Pension Credit to top up their joint income to 248.80 a week (the standard rate of Pension Credit for a couple rising to 255.25 from April 2019).
After the rules change….
Peter and Jean’s position will be protected if they are still receiving Pension Credit when any changes come in - as long as their circumstances stay the same.
However, a couple in this situation who need to claim benefits for the first time after 15 May 2019 would not be entitled to Pension Credit due to Jean’s age. Peter’s State Pension is too high for them to receive Universal Credit (currently 498.89 a month, around 115 a week, and not due to change in April 2019).
So, their total joint income will just be Peter’s State Pension (around 143.50 a week from April 2019). If Jean cannot find a job, which may be difficult given her age and time out of the labour market for caring, this will be their income for another 4 years until Jean reaches SPA at age 66. By this time Peter will be 74.
If Peter was single…..
However, if Peter was living on his own, because they separate, or Jean dies, he would be able to claim Pension Credit in which case his State Pension will be topped up to 163.00 a week (167.25 from May 2019) – considerably more than the Universal Credit standard rate for a couple of about 115 a week.