Pension Credit could top up your state pension – do you qualify for £177 per month?

Therese Coffey outlines the benefits of Pension Credit scheme

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Pension Credit provides extra money to help people who are over state pension age and on a low income with their living costs. By claiming Pension Credit, people could see their weekly income topped up to £177.10 per week and qualify for a free TV licence if they are aged 75 or over.

People who have housing costs could get an extra amount to help cover them, such as ground rent if one’s property is a leasehold, some service charges or charges for tents and site rents. The amount that can be received depends on the housing costs.

Pension Credit is separate from state pension, and people can get Pension Credit even if they have other income, savings or own their own home.

By receiving Pension Credit, one will automatically receive Cold Weather Payments and will also be eligible for help with NHS costs, such as prescriptions, dental treatment, glasses and transport costs for hospital appointments, as well as a free TV licence for people aged 75 or over.

People who have a partner must include them on their application and will be eligible if either them and their partner have both reached state pension age or one of them is receiving Housing Benefit for people over state pension age.

A partner is defined as someone’s husband, wife or civil partner whom one lives with, or someone a claimant lives with as a couple, but is not married to or in a civil partnership with.

When applying for Pension Credit, income is calculated to determine how much a person can claim. If they have a partner, income is calculated together.

The Guarantee Credit element of Pension Credit tops up single pensioners’ weekly income to £177.10 and a couple’s joint weekly income to £270.30.

For those whose income is higher, it might still be possible to get Pension Credit if one has a disability, is a carer for someone, has savings or has housing costs.

The amounts that count towards one’s income when it is assessed include state pension, other pensions, earnings from employment and self-employment and most social security benefits, such as Carer’s Allowance.

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However, not all benefits are counted as income, such as Attendance Allowance, Christmas Bonus, Child Benefit, Disability Living Allowance, Personal Independence Payment, social fund payments such as Winter Fuel Allowance, Housing Benefit and Council Tax Reduction.

For people who have deferred their state pension, the amount they would be receiving if they had not deferred still counts as income, and it is not possible to build up extra amounts of Pension Credit by deferring one’s state pension.

People who have savings or investments of more than £10,000 will see this contribute towards their income assessment. Every £500 over £10,000 is treated as £1 income a week.

People who have savings or a second pension could get the Savings Credit element of Pension Credit if they reached state pension age before April 6, 2016 and have saved some money for retirement, such as a personal or workplace pension.

Single claimants get up to £14.04 Savings Credit per week, whereas people in a couple can receive up to £15.71 a week. People who do not receive the Guarantee Credit part of Pension Credit may still get some Savings Credit.

People who have a severe disability could get an additional £67.30 a week, providing they receive Attendance Allowance, the middle or highest rate from the care component of Disability Living Allowance (DLA), the daily living component of Personal Independence Payment (PIP) or the Armed Forces Independence Payment.

Those who care for another adult could receive an additional £37.70 a week if they get Carer’s Allowance or have claimed Carer’s Allowance but are not receiving it because they already get another benefit which pays a larger sum.

If a claimant and their partner have both claimed or are getting Carer’s Allowance, they can receive get this additional amount.

People who are responsible for a child or young person could get an additional £54.60 per week for each child or young person they are responsible for. This goes up to £65.10 a week for the first child, if they were born before April 6, 2017.

The child or young person must normally live with the claimant and be under the age of 20.

If the child is 16 or over and under the age of 20, they must be in, or have been accepted for approved training, such as Foundation Apprenticeships or a course of non-advanced education, such as studying for GCSEs or A levels.

If the child is in education, it must be for more than 12 hours per week on average.

Those receiving Tax Credits may not receive this additional amount of Pension Credit for caring for a child, but might still be entitled to Child Tax Credits.

If the child or young person is disabled, one might also get an additional amount of either £29.66 per week if they receive DLA or PIP, or £92.54 a week if they are blind or get the highest rate care component of DLA, or the enhanced daily living component of PIP.

Applications for Pension Credit can be submitted up to four months before one reaches state pension age, and people who submit their claim after reaching state pension age can backdate their claim for up to three months.

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