Q. I have heard there are changes to some pension benefits for couples where one of the couple is pensionable age but the other is not and this could cause a drop in income. Is this correct and how could it affect people in this situation?
A. From May 15, if you are a mixed aged couple (whether married, cohabiting and/or a same sex relationship) where one person has reached pensionable age but the other person is still of working age, then you would be assessed under the Universal Credit system and not Pension Credit.
The changes also apply to claims for Housing Benefit.
These changes will only apply to brand new claims, if you currently have Pension Credit and/or Housing Benefit in payment then you will not be transferred to Universal Credit.
By way of example, you have a couple where one person is aged 66 and their partner is 60. Currently the minimum guaranteed income this couple would be entitled to under the existing system would be Pension Credit of £248.80 per week – assuming the household has no other benefit, pension or other income and no relevant savings.
This figure also excludes any eligible payments towards rent.
From May, provided there is no existing claim in payment for Pension Credit, this couple would have instead to claim Universal Credit and the guaranteed weekly income (again excluding any relevant rental costs and that the household has no other benefit income, savings, etc.) would drop to approximately £115 per week.
In most households of this nature, the retired person will probably be receiving their State Retirement Pension (which is classed as income) and this would reduce the amount of Universal Credit paid on a pound for pound basis (this would also happen for Pension Credit) so Universal Credit may not even be paid at all.
Furthermore the partner of working age will also have to adhere to a Universal Credit commitment for example if they were fit for work then they would have to job seek in order to receive any benefit.
The changes announced currently only cover Pension Credit and Housing Benefit.
Some other forms of assistance, for example council tax reduction, certificates for dental treatment, glasses, etc., use the same formula to assess eligibility for mixed aged couples. At the moment these changes should not affect these types of benefits.
If you are a couple in this situation and one of you are due to retire on or before May 2019 it would be advisable to seek specialist advice to assess how these changes may affect you.