Benefit change will have devastating effect on poorest pensioners

Elderly couple

Changes to Pension Credit could cost some elderly couples up to £7,000 a year

8th March 2019 by Gareth Jones 0 Comments

Benefit changes set to be introduced by Westminster will have a “devastating impact” on some of Scotland’s poorest pensioners.

Thousands of Scotland’s poorest pensioners who are in a “mixed age couple” could stand to lose out on around £7000 a year when new UK Government changes to Pension Credit come into force in May.

The move by the UK Government was investigated this week by the Scottish Parliament’s Social Security Committee, where the national charity for older people Age Scotland gave evidence about the effects the change will have.

Mixed age couples affected are those where one is below pension age and one is in receipt of a low state pension.

Pension Credit tops up the state pension to £163 a week for a single person and £248.80 for a couple. The Universal Credit rate, which would be applicable for new mixed age couple applicants, is around £115 a week. The difference is around £7,000 a year for those on the lowest incomes.

The move was quietly announced through a Written Ministerial statement on a busy Brexit vote day in the UK Parliament in January. The new changes will go in effect on 15 May.

Until now, mixed age couples will be able to choose whether they claim Pension Credit or working age benefits. However from the spring, a couple will have to wait until they both reach their State Pension Age in order to claim Pension Credit.

Those who are not able to be on Pension Credit will also lose out on cold weather payments, housing benefit, Council Tax Reduction, social fund funeral payments and may not be entitled to the warm home discount.

Age Scotland’s chief executive, Brian Sloan said: “This outrageous new policy will have a devastating impact to Scotland’s poorest pensioners and will make older couples of mixed age poorer for living together. When the move was announced the UK Government did not know how many people it would impact. Weeks later it emerged that it would impact 15,000 people in 2019/20, 30,000 the following year and 40,000 the year after that, but still no official assessment for Scotland.

“We estimate that at least 1500 of the poorest pensioners in Scotland will be hit next year and double that the following year. It’s not acceptable. The health of Scotland’s most vulnerable pensioners will be harmed as they struggle to pay bills and heat their homes all because of an out-of-touch policy.

“Right now, four in ten pensioner couples have difficulty paying their fuel bills and 38% of people over the age of 50 are financially squeezed. Pension credit is massively underclaimed and can help older people out of pensioner poverty which affects around 170,000 in Scotland. .

“We urge the UK Government to reverse this move through the primary legislation it requires as it will leave thousands of our poorest pensioners worse off. While challenging, the Scottish Government should also look at how it could mitigate against the effects of this disastrous policy.”

Pensions minister Guy Opperman said: “This replaces the previous system whereby the household could access either pension credit and pension age housing benefit, or working-age benefits.

“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.”