Welfare Change Warning – Mixed Age Couples

29 Apr 2019
News
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A change to the welfare benefits system beginning 15 May 2019 will leave some pension-age benefit claimants significantly worse off. Steven, our Money Advice Officer, explains how this change will work in practice and what you can do to avoid being affected.

What’s changing?

After 15 May 2019, pensioners won’t be able to make a new claim for Pension Credit if they have a partner who is below their pension age. Instead, they will need to claim Universal Credit as a couple, which is paid at a much lower rate.

Previously, people had the choice to claim either Pension Credit or Universal Credit. The basic rate of Pension Credit for a couple is £255.25 per week, whereas under Universal Credit this works out at £115.13 per week, so this is a drop of £140.12 per week, or £7,286.24 per year.

How does it work?

The change only stops you making a new claim for Pension Credit, so if you already get Pension Credit you won’t be affected unless you have a change of circumstances. You also won’t be affected if you have a Severe Disability Premium in your current benefits because this prevents you from claiming Universal Credit entirely.

Examples

Peter is 66 and has just retired. His partner Margaret is 63 and was working at a local supermarket until 17 May 2019 when she had to stop because her arthritis got so bad she couldn’t manage the job any longer. They must claim Universal Credit as a couple.

Jacqueline is 68 and her partner Francesca is 62. They have been claiming Pension Credit as a couple for the last couple of years, but Francesca has been offered a job to help out in her brother’s business. The wages she earns means they don’t qualify for Pension Credit any more. After a few months, the business closes and Francesca loses her job. They can’t make a new claim for Pension Credit and must claim Universal Credit, even though they were getting Pension Credit in the past.

Abdul is 67 and his wife Samina is 60. They have been claiming Pension Credit since Abdul retired 2 years ago. After Samina’s mother passed away, Abdul and Samina travelled to Pakistan to attend the funeral and sort out the estate, returning after 6 weeks.  Pension Credit is only paid for 4 weeks when you are out of the country, so the claim ended. When they return, they cannot reclaim Pension Credit and must claim Universal Credit instead.

What can you do about it?

If you are part of a couple where one of you is above pension age and one of you is below, there are some steps you can take to prevent this change applying to you.

  • Claim Pension Credit as soon as possible if you are entitled to it. If you have a valid claim for Pension Credit which starts before 15 May 2019, you can stay on Pension Credit after this date.
  • You can backdate Pension Credit up to 3 months without needing any special reasons, as long as you were entitled to if for the whole period. This means the absolute cut-off date is 13 August 2019.
  • If you are already receiving Pension Credit, don’t allow your circumstances to change in a way that will end your claim, if you can help it.
  • If you are both getting disability benefits such as Disability Living Allowance, Personal Independence Payment or Attendance Allowance, check if you are eligible for the Severe Disability Premium, which will prevent you having to claim Universal Credit.

Things to remember

This change only affects couples until the youngest person reaches their pension age (a handy pension age calculator is available on gov.uk). You will still be affected if you move in with a new partner after this change applies, even if Pension Credit was already in payment.

If you need any advice or practical help managing this change or taking steps to avoid it, get in touch with Steven for a free appointment.

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