Pension Credit

Overview

There are two parts to Pension Credit (which is a non-taxable, income-related benefit) ‘Guarantee Credit’ and ‘Savings Credit’.

Guarantee Credit

This element will top up your weekly income where your income has fallen below £167.25 (for single people) or £255.25 (for couples).

Savings Credit

If you have saved up money towards your retirement, for example a pension, you may be able to receive an extra payment. However your eligibility may be affected if you have reached State Pension age on or after 6 April 2016. The extra payments will be up to £13.73 per week if you are single and up to £15.35 per week if you are in a couple.

You may be eligible for further entitlement if you’re a carer, if you’re severely disabled, have certain housing costs, or if you have responsibility for a child or young person.

Visit the Gov.uk Pension Credit calculator to work out how much you might be entitled to www.gov.uk/pension-credit-calculator.

You can also check general benefit entitlement at www.turn2us.org.uk

Children and young persons

If you are responsible for a child or young person you may be able to receive the ‘child addition’ with your Pension Credit increasing your entitlement further. You will normally receive £53.34 or £63.84 per week for each child or young person you’re responsible for and if they’re disabled, you may get extra.

You will need to satisfy certain conditions to qualify for the child addition:

  • The child or young person you care for, must usually reside with you and be under the age of 20

If the child or young person you care for is 16 or over and under the age of 20 they need to be:

  • In an approved training scheme, such as Foundation Apprenticeships, or
  • On a course of non-advanced education, for example, studying for GCSEs or A levels

If the child or young person is receiving education, it must be for more than 12 hours per week.

Tax credits

If you are in receipt of Tax Credits, you may receive further support for the child or young person you are responsible for. You should notify HM Revenue and Customs of any changes that may increase or decrease your entitlement.

Payments

All benefits, pensions and allowances will be paid directly into an account, for example a bank account.

Eligibility

To qualify for Pension Credit you need to satisfy the following eligibility criteria:

  • You must reside in England, Scotland or Wales
  • You or your partner must have reached Pension Credit qualifying age

For the purposes of Pension Credit your partner is your husband, wife or civil partner (if you live with them) or someone else you live with, as if you were married.

Changes to Pension Credit eligibility from 15 May 2019

From 15 May 2019, if you’re in a couple you’ll only be eligible to start receiving pension credit when either:

  • Both you and your partner have reached Pension Credit qualifying age, or
  • One of you has reached Pension Credit qualifying age and is claiming Housing Benefit for you as a couple
  • If on 14 May 2019, you are not already receiving Pension Credit you will be able to backdate your claim and you could still be eligible to receive Pension Credit.
  • You will be able to make a request, asking for the claim to be backdated to 14 May or before. The deadline to make your application is the 13 August 2019.
  • If you are still not eligible to receive Pension Credit you will be able to apply for Universal Credit instead.

If you are getting Pension Credit now and you are part of a couple

  • You’ll continue to receive Pension Credit after 15 May 2019. If your entitlement stops for any reason, you will not be able to start getting it again, unless you or your partner qualify under the new rules.

If you are getting Pension Credit and you’re single

  • From 15 May 2019, your Pension Credit will stop, if you start living with a partner who is under Pension Credit qualifying age. It will start again once your partner reaches Pension Credit qualifying age.

Savings Credit

You will be able to start receiving Savings Credit if you and your partner (if you have one) reached State Pension age before 6 April 2016.

If your partner didn’t reach State Pension age before 6 April 2016, and you've been receiving it since before 6 April 2016, it will continue, providing there are no breaks in your entitlement.

If you stop being eligible for Savings Credit for any reason, you will not be able to start getting it again.

Income that is taken into account

For the purposes of working out income for Pension Credit the following is taken into account:

  • State Pension
  • Other pensions
  • Most social security benefits, for example Carer’s Allowance
  • Your savings and investments over £10,000 (£1 is counted for every £500 or part £500)
  • Your earnings, income

The following benefits will not count:

  • Attendance Allowance
  • Christmas Bonus
  • Disability Living Allowance
  • Personal Independence Payment
  • Housing Benefit
  • Council Tax Reduction

If you are not getting a private or workplace pension, but you are entitled to it, the amount you’d expect to receive will be calculated as income from the date you were able to have it, if you had claimed it.

If you and/or your partner receive Pension Credit and decided you wanted to defer your State Pension, the rules say you cannot benefit from that, therefore you will not be able to build up extra State Pension or a lump sum for deferring it.

When working out if you qualify for Pension Credit, the income you’d get from your State Pension is included whether you’re claiming it or not.

Self assessment

If you’re registered for Self Assessment, you need to inform the Pension Service about how much Income Tax you expect to pay for the current tax year, because this will affect how much Pension Credit you will receive.

You should contact the Pension Credit helpline if you are intending to leave Great Britain (England, Scotland and Wales) for any period of time because your entitlement may be affected. You will not be eligible for Pension Credit if you leave Great Britain permanently.

How to claim Pension Credit

Telephone - If you are able to, the easiest method to apply for Pension Credit, is by telephone. Someone can call on your behalf, but you will need to be present at the time.

A paper application

Alternatively, ask someone to call on your behalf (such as a friend, family member, local advice agency to request a paper application.

Refer to contact details section below.

Supporting documents - You will need the following information to complete your application:

  • Your National Insurance number
  • Details of your income, savings and investments
  • Details of your bank account

You can apply for Pension Credit no earlier than 4 months before you reach Pension Credit qualifying age.

You will be able to make an application any time after you reach Pension Credit qualifying age but your claim can only be backdated for 3 months.

Appeals

If you are unhappy with your decision you have the right to challenge it by asking for a mandatory reconsideration. This must be done prior to proceeding to an appeal. You may want to seek specialist advice from a welfare benefits adviser, you could contact your local advice agency.

Changes in circumstances

It is essential to report any change affecting you or your partner’s personal and financial circumstances. You risk your claim being stopped or reduced if you don't. Changes to report include:

  • If you or your partner start work or your work ends
  • If you or your partner go into hospital or a care home
  • Anyone moving in or out of your house
  • If you move house
  • Changing your name
  • Changing your bank account
  • Changes to your Post Office card account
  • If you or your partner leave England, Scotland and Wales for over 4 weeks
  • You cease to look after a child or young person under the age of 20
  • You start to look after a child or young person under the age of 20

Changes to your income or expenses need to be reported to, including:

  • Housing costs, including ground rent or service charges
  • Any benefits that anyone living in your home receives, including receiving a new benefit or a benefit being stopped
  • Occupational or personal pensions, such as receiving a new pension or taking a lump sum out of your pension pot
  • Any other income, for example foreign pensions or Working Tax Credits
  • Any changes to savings, investments or property

The Pension Credit helpline, will be able to advise you if you’re not sure if you need to report a change. It is always best to check as you risk being taken to court or you may have to pay a penalty if you give wrong information or do not report a change.

Assessed Income Periods (AIPs)

Your Pension Credit award letter will say if you have an AIP. This is a period of time when you don't need to report changes to your pensions, savings or investments. However, if your AIP has no end date you must still report changes to your personal circumstances, such as, moving into a care home.