Key payment changes have come in from this month
The Department for Work and Pensions (DWP) has provided an update on its work to inform eligible pensioners that they may be entitled to extra payments worth £3,900 a year. DWP estimates suggest that hundreds of thousands of individuals are still missing out on this benefit, with the average successful claim providing an extra £3,900 in support.
Following a recent inquiry into the DWP’s strategy for encouraging applications, DWP minister Torsten Bell outlined the department’s latest efforts to increase awareness. He said: “We are now writing to all pensioners who make a new claim for Housing Benefit and who appear to be entitled to Pension Credit – directly targeting this group and encouraging them to make a claim.
“In the longer term, we will be bringing together the administration of Pension Credit and Housing Benefit, so that pensioners receive both Housing Benefit and any Pension Credit that they are entitled to.”
The DWP also recently delivered a leaflet about Pension Credit alongside letters sent to state pensioners regarding their payment increase this month.
Pension Credit works by boosting a recipient’s weekly income, while also unlocking access to other forms of support, including a free TV licence for those over 75 and assistance with certain NHS expenses. By claiming, individuals can see their income boosted to £227.10 for single claimants and up to £346.60 for couples, plus additional sums depending on a person’s situation, such as if they care for someone or live with a disability.
The Government redoubled its efforts to get people to apply, following a change in eligibility for the Winter Fuel Payment last year, which now requires claimants to be receiving certain means-tested benefits like Pension Credit. Previously, the Winter Fuel Payment was largely accessible to those of state pension age, and was worth £200 or £300 the previous winter.
Statistics from the DWP released in February indicated that since the announcement of the eligibility changes for the Winter Fuel Payment, there’s been a surge in Pension Credit claims. A total of 235,000 Pension Credit applications were lodged in the 30 weeks thereafter, marking an 81 per cent rise compared to the previous year.
In that same period of 30 weeks last year, the DWP verified 117,800 new Pension Credit claimants. State pension payments increased 4.1 per cent increase this month. This adjustment increased the full new state pension weekly rate from £221.20 to £230.25—a mere £600 annually shy of exceeding the personal allowance threshold and becoming liable for income tax.
Benefit specialists are flagging up concerns that this increment could cause some individuals to forfeit their Pension Credit entitlement. Rebecca Lamb, external relations manager at Money Wellness cautioned: “Many people understandably assume that a small rise in their pension is a good thing.
“But if it pushes them just over the personal tax allowance, it won’t just mean paying a bit of income tax – it could disqualify them from Pension Credit, which in turn opens the door to a much larger loss.” She highlighted the potential for a significant loss of income for some people, explaining: “Pension Credit acts as a gateway to a wide range of help: Housing Benefit, Council Tax Reduction, free NHS dental and eye care, the Warm Home Discount, Cold Weather Payments, and even the free TV licence for over-75s.
“In total, someone could end up losing more than £8,000 a year in support, all because their pension creeps just above the threshold. This could leave some of the most financially vulnerable people in society worse off, not better off, as a result of a modest increase in income.”
