A total of 60,000 people who have a small enough income to claim Pension Credit, and are over State Pension age so they qualify, are unable to get the benefit because of a Department for Work and Pensions Rule. The credit is seen as a ‘gateway benefit’ because not only does it top up your pension with additional payments, it opens the door to other benefits from Winter Fuel Payments to a free TV licence.
It opens up access to Housing Benefit, the Warm Home Discount Scheme, mortgage payment help, Council Tax discount and help with NHS prescriptions as well as other benefits and discounts. But thousands of people cannot get it despite being on low incomes – below £218 a week.
Since 2019, the rule has been that if you are in a couple and one is over State Pension age, while one is under, you must, as a couple, claim Universal Credit rather than Pension Credit. Yet 60,000 people claim Universal Credit instead of Pension Credit because of this rule – disqualifying them from some of the other support.
It is also harder to get Universal Credit backdated when you claim, according to AgeUK. Some people on Universal Credit can still qualify for Winter Fuel Payments.
Pension Credit is designed to provide financial support to individuals who have reached State Pension age and have a low income. It helps boost their income to a minimum level and can also provide additional benefits. There are two types of Pension Credit:
1. Guarantee Credit:
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This ensures a minimum income level for those who have reached the State Pension age.
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If your income is below a certain threshold (for 2024, this is £201.05 per week for a single person and £306.85 for couples), the Guarantee Credit tops it up to that amount.
2. Savings Credit:
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This is an additional payment for people who saved some money towards their retirement, such as through pensions or savings.
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Savings Credit is only available to those who reached State Pension age before 6 April 2016.
Pension Credit is not automatically given, so eligible individuals need to apply for it. It’s a means-tested benefit, meaning that the amount depends on your income, savings, and circumstances.
Universal Credit provides financial support to individuals and families with low income or who are out of work. It combines multiple older benefits into one single monthly payment, simplifying the welfare system. Universal Credit is designed to help with living costs and encourage people to work or increase their working hours by tapering the benefit as earnings increase.
What Universal Credit Replaces:
It replaces six older means-tested benefits, commonly referred to as “legacy benefits”:
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Income-based Jobseeker’s Allowance (JSA)
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Income-related Employment and Support Allowance (ESA)
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Income Support
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Working Tax Credit
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Child Tax Credit
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Housing Benefit
Eligibility:
You may be eligible for Universal Credit if you are:
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Aged 18 or over (in some cases, 16-17 year-olds can qualify)
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Under State Pension age
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On a low income or out of work
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Living in the UK
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Have savings below £16,000
How Universal Credit Works:
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Single Monthly Payment: It combines all previous benefits into one monthly payment, covering basic living costs, rent (if eligible), and additional amounts depending on your circumstances (such as if you have children or a disability).
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Tapering of Benefits: As you earn more through work, your Universal Credit reduces gradually, rather than stopping abruptly. The idea is to ensure that work always pays, making it financially worthwhile for claimants to find employment or increase their hours.
Components of Universal Credit:
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Standard Allowance: The basic amount everyone receives, depending on whether they are single or in a couple.
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Housing Costs: To help cover rent or mortgage payments.
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Childcare Costs: Available to those with children to help with the costs of childcare while working.
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Carer’s Element: For those providing care to a severely disabled person.
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Child Element: Additional support for those with children.
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Limited Capability for Work and Work-Related Activity (LCWRA): Additional amounts for individuals with health conditions or disabilities that affect their ability to work.
Payments and Adjustments:
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Universal Credit is paid monthly, and your entitlement is assessed based on your circumstances during each monthly “assessment period.”
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Your payments are adjusted depending on your income, savings, and any changes in circumstances, such as housing, childcare costs, or disabilities.
