MY wife and I have State Pensions topped up with Pension Credit, comprising both Guarantee Pension Credit and Savings Credit.
Q We were pleased to hear that pensions were going up by 5.2 per cent in April, but were then alarmed to receive notification of forthcoming changes to our Pension Credit. This showed an increase in Guarantee Pension Credit of only £0.22 a week and our Savings Credit is being reduced by £2.53.
So much for the 5.2 per cent increase! Can you explain?
Mr. C (Sunderland)
A YOUR State Pensions will go up by 5.2 per cent, but your total income from the State will rise by less than three per cent.
The Government is putting up State Pensions, along with most other benefits, from April by 5.2 per cent in line with the rise in inflation, but this will not apply to Pension Credit.
Guarantee Pension Credit, what the Government thinks is the minimum level for older people to live on, must by law be increased by at least the rise in earnings.
The Government is increasing this level by 3.9 per cent from April even though earnings rose by only 2.8 per cent.
The overall effect of these changes is that Guarantee Pension Credit will hardly rise at all for people who are on State Pensions. Savings Credit, which is intended to reward thrifty pensioners, will actually be reduced.
The minimum income you need to qualify for Savings Credit will rise by 8.4 per cent from £103.15 to £111.80 for single people and from £164.55 to £178.35 for couples.
The maximum Savings Credit payment for singles will drop from £20.52 to £18.54 and from £27.09 to £23.73 for couples.
Q I WORK part-time for £6.30 an hour, so some weeks I do not earn enough to pay National Insurance.
Will this mean that I will not be entitled to benefits if I go sick or lose my job? As I have a work’s pension I do not think I could expect much in means-tested benefits.
Mrs M (Ryhope)
A PEOPLE only have to pay National Insurance Contributions if they have earnings above a certain level (currently £139.01 a week).
However, they will be treated as having paid National Insurance if their earnings are in a bracket below this (between £102 and £139 a week). Being treated as paying National Insurance is no different for benefit purposes than from actually paying it.
If you go sick your employer may have to pay you Statutory Sick Pay for up to 28 weeks regardless of your National Insurance record. The rule for this is that your average earnings have to be above a certain figure (£102 a week or more).