Changes in the welfare Reform Bill will have a direct effect on couples with one working and the other having reached Pension Credit Age. Indeed these couples can end up with up to GBP100 less a week than those currently in an identical position.
Under the proposed Universal Credit system a pensioner could be better off living alone receiving Pension Credit rather than receiving Universal Credit as a couple.
In the future couples, where one partner is under Pension Credit age, will have to claim Universal Credit. The Government wants to ensure that the younger person has greater incentives to work and in certain situations couples in work could benefit from the changes. However many will lose out. Unemployed people approaching pension age can find it hard to return to employment and those unable to work through sickness or being a carer could also lose out.
Age UK has produced a policy paper looking into the impact of the proposed reforms also reveals that older people with younger partners who receive the Universal Credit could lose other benefits related to Pension Credit such as cold weather payments and he Warm Homes Discount as well as any local concessions.
Michelle Mitchell, Charity Director of Age UK said:
“Pension Credit currently brings a couple’s income to being just the right side of the poverty line Just because one half of a couple is below Pension Credit age does not mean that their income needs drop and for those suffering unable to work through sickness or caring for others there is no opportunity to supplement their partner’s income. Many of those nearing the State Pension Age can find it difficult to find work no matter how hard they try.
“We are extremely concerned that there has been no consultation on such a major policy change and full details of the system are not yet available even though the Welfare Reform Bill has been considered by the House of Commons and is entering its last stages in the House of Lords. There are just too many questions that have been left unanswered.”
There are currently 93,000 couples receiving Pension Credit where one partner is aged below 60. While those already in receipt of Pension Credit will continue to be able to receive this, new claimants will have to claim Universal Credit instead. As well as lower benefit rates the savings rules are much harsher. Currently there is no savings limit for Pension Credit but in the future those with a low income but over £16,000 savings will not be entitled to Universal Credit and any savings over £6,000 will result in a steep withdrawal of support.. This could result in older people having to spend their retirement savings so they will be able to support their younger partner.
Age UK believes it is essential that if couples have to claim Universal Credit in the future the benefit levels must reflect the fact that one partner is a pensioner. .Otherwise, couples with very similar circumstances will receive very different support simply because they need to claim before or after the introduction on Universal Credit. As the date for the start of Universal Credit approaches the revised policy could act as a disincentive for younger partners to seek employment as if their partner stops being entitled to pension credit, they may not be able to claim it in the future under Universal Credit.
Source: Age UK
