Pension Credit Warning - Could this affect you

Following the Government’s quiet announcement in January, that from May 15th 2019 ‘mixed age couples’ – where one partner is of working age and the other is above State Pension age – will no longer be entitled to put in a new claim for Pension Credit, Age UK is warning that this could leave some of the poorest pensioners paying a hefty price for having a younger partner, with mixed age couples potentially losing out on around £7000 per year.

Age UK is warning that the Government’s policy change effectively means that many pensioners might find themselves in the absurd position of being financially better off if they split up and live apart from their partner. 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.

Although in theory this change will not impact on existing claimants – only new ones – if a mixed age couple temporarily loses their eligibility for Pension Credit then from May 15th they will be unable to regain it and will be thrown onto the Universal Credit regime, the problems of which are well known. This could happen simply because the pensioner partner travels abroad to see relatives for just over four weeks.

Changes in brief

New claims: 

• most new claims for means-tested benefit must be for Universal Credit and not for pensioner benefits – the younger partner will be subject to ‘work conditionality’ but the older partner will not 
• if a single pensioner forms a new ‘mixed age’ couple on or after 15 May 2019, entitlement to pension age Housing Benefit and Pension Credit will end
• separate changes introduced from 16/1/19 mean that disabled claimants who receive a severe disability premium in a legacy benefit or who had that entitlement in the previous month) will not be able to claim either UC or pensioner benefits and must instead claim the appropriate working-age ‘legacy benefit’ including Housing Benefit under the ‘working-age’ rules

Existing claims for pensioner benefits:

• mixed-age couples already in receipt of Pension Credit and Housing Benefit (pensioner rules) will retain this entitlement unless their circumstances change
• savings provisions in the Regulations mean that if a couple loses entitlement to Pension Credit but not to Housing Benefit (pensioner rules) or vice versa, they will retain a right to claim pension-age benefits
• if entitlement to both benefits is lost however, any new claim will be for UC or working-age legacy benefits – even if entitlement is lost for one day, there is no way back to entitlement to pensioner benefits
• it is possible to make a backdated claim for pensioner benefits - where the claim is made on or before 13.8.19
• if a younger partner is claiming working-age legacy benefits they may be able to retain entitlement with the older person as partner – until affected by UC migration rules