What is Guaranteed Pension Credit?
Pension Credit is a means tested benefit for those which have reached state pensionable age. This can be checked online. It ensures that in retirement that income does not fall below a specified level. It is made up of different amounts and premiums which all together made the ‘appropriate amount’
How is Pension Credit Made Up?
Standard amount for a single person £201.05
Standard amount for a couple £306.85* (see below for major change from May 2019)
Carer Premium £42.75**
Severe Disability Premium £76.40 or £152.80*** if both people in a couple qualify.
Child Premium – £72.31 for any child born before 6th April 2017
£61.88 for a child born after 6th April 2017 (Subject to the 2 child cap)
Disabled Child element £33.67 if the child receives DLA/PIP or £104.86 if the child receives the highest rate for DLA care or enhanced daily living for PIP.
**You qualify for a Carer Premium if you provide care of 35 hours a week to someone in receipt of Attendance Allowance, Disability Allowance and or Personal Independence Payment and receive Carers Allowance. If you receive a State Retirement Pension you will not qualify for Carers Allowance, but may qualify for the ‘underlying entitlement’. This may entitle you to some Pension Credit which in turn acts as a Passporting benefit to other services such as full council tax reduction. It is therefore worth applying even only for £1 of entitlement.
**If both of you in a couple claim a disability benefit you could claim a double Severe Disability Premium which could be significant in determining whether there is entitlement or not. You both need to be providing full time care for each other and NOT claiming Carers Allowance.
What is the Means Test?
Most income sources and capital sources will be taken into account when calculating entitlement to Pension Credit. This includes any Pensions you receive, any earned income and any savings that you have above £10,000. However, there is no upper capital limit for this.
What Happened in May 2019?
Up until May 2019, a mixed age couple where one person was over state pension age and the other was below could make a claim for Pension Credit. However after this date, mixed couples could no longer make claims for Pension Credit and would have to make a claim for Universal Credit.
However, if the youngest person in the claim was receiving a Severe Disability Premium in a means tested benefit including Housing Benefit before the eldest person reached state pension age, they would not pass the Severe Disability Gateway and would not be eligible for Universal Credit. They could then make a claim for Pension Credit.
Conversely, there are also instances where a mixed age couple is approaching pension age where they could be better off on Universal Credit. If someone approaching Pension Credit age and in receipt of ESA, they should apply for Universal Credit as the Support component could be included from day one making the family better off.
In a mixed age claim if the person of pensionable age is receiving Attendance Allowance they are automatically treated as receiving the Support Group element of Universal Credit. This could significantly increase the couples income.
These are a few of many examples of how mixed couples operate under the system.
This is a rough guide to how Pension Credit operates and it is a complex benefit. Please always seek advice from a benefits advisor to ensure that you will not be worse off.
This advice is provided by our Benefits Advisor, Robert Mandelstam. The information provided above is up to date for the financial year ending 5th April 2024.
We have factsheets and advice on the following topics (these are up to date for the financial year 2023/2024):
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Robert Mandelstam is a Welfare Benefit Advisor at The Maggie’s Centre at the Royal Marsden, a charity focused on providing financial, emotional and practical support to those living with cancer. He is now also working to support our six charities as part of the Better Together project. Robert has been working in the field of welfare benefit advice for over 10 years in a range of different settings, namely, the NHS, local authority/housing providers and other third sector organisations. Robert aims to break down the barriers which exist around accessing support for some of the most vulnerable people in society and is adept at providing advice from the initial stages of a claim, through to representation at benefit tribunals.