Wednesday, 16 January 2019

Government using Brexit vote to bury pension credit cut

I'm not going to comment on the current Brexit vote as many others will cover it and the implications are still not clear.

Instead I will be commenting  on the fact that Ministers have used the looming Brexit vote to bury bad news about changes to a state pension top-up that could leave some older couples more than £7,000 worse off.

The Daily Mail reports that 

The Department for Work and Pensions yesterday announced that planned cuts to pension credit – a top-up available to the poorest pensioners – will be enforced from May this year.
Currently, so called ‘mixed age’ couples, where only one partner has reached the pension age of 65 while the other is not, can claim pension credit if they wish because one of them is over state pension age.
But from May 15 this year, such couples will no longer be eligible for pension credit. They will, instead, be entitled to apply for Universal Credit, which merges six benefits into one.
In a statement released late on Monday , pensions minister Guy Opperman said: 
‘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.
‘This change will ensure that the same work incentives apply to the younger partner as apply to other people of the same age, and taxpayer support is directed where it is needed most.’
But Steve Webb, director of policy at Royal London, said this change could see some couples lose more than £7,000 a year, because working age benefits are usually less generous than pension credit.
Webb said the rate of pension credit for a couple is currently £255.25 per week, or £13,273 per year, while the rate of universal credit for a couple is £498.89 per calendar month or £5,986.68 per year.
That’s a difference of £7,286 per year, Webb said. He added that the changes to eligibility will put pressure on the younger person in the couple who has not yet reached pension age to seek work.
‘Under the proposed rules, couples where one partner is over pension age and is not expected to seek work will get the same rate as a couple where both partners are under pension age and both are expected to seek work,’ he said.
Webb said the change means that some couples could lose thousands of pounds depending on whether their claim falls a day before or a day after the May deadline. 
Reading this it seems that if I was to enter into a relationship with a woman who is not of pensionable age before May 15th, it could be that I could loose my pension (assuming that new relationships are taking into account).
Certainly the idea that people in a relationship where one person is not of pensionable age seek to live off one pension if we take the governments view that  the" same work incentives apply to the younger partner as apply to other people " indicates they believe people are choosing to live off one partners credit .
The New Statesman gives this example back in October

Jen and her husband got married in 2011, and have been together 16 years. They live in Lincoln.
Jen, who volunteers, is unable to work as she cares full-time for her husband, who has lung conditions that can make him unconscious, and relies on a mobility car to get around after suffering a stroke a few years ago.
They therefore have a low income, and rely on pension benefits to afford their living and medical costs.Jen – who prefers not to give her full name – is 47, and her husband is of pension age at 66. They receive Pension Credit to top up her husband’s state pension and his small workplace pension, as well as receiving the help with rent and council tax available to pensioners. Jen receives Carer’s Allowance, and her husband also claims the disability benefit Personal Independence Payments.But with the new welfare system Universal Credit on its way, Jen calculates that they will end up £190 worse off a week, leaving them to live on about £100 a week.
Small wonder the government have chosen to bury bad news in a week that will be dominated by the Brexit vote.

1 comment:

Padi Phillips said...

In the context of the subject of this article, it's important to remember that it will only be new cases that will be affected, those already claiming Pension Credit for a younger partner will continue to do so for the forseable future, unless there is a change of circumstances, and here the DWP is often very sneaky. Even something as trivial as an address change will be seized upon by the DWP as a reason to attempt to bully someone onto UC. At present, I believe that an address change is insufficient grounds, but people can transfer 'voluntarily' (bullied by the DWP). However, more significant changes can trigger a mandatory transfer, even something as trivial as the older, state pensioner, spending more than a month abroad. It's also important to note that the younger partner will also be subject to the full conditionality rules of UC. Currently under Pension Credit there is no requirement to work, but under UC there is full conditionality which means 35 hours a week job seeking activity, and severe sanctions if even small parts of the Claimant Commitment are not fulfilled.