Universal Credit has been prominent in the news lately, whether it’s the Secretary of State for Work and Pensions Amber Rudd acknowledging that a rise in foodbank use may be linked to the highly troubled roll-out, or the much trailed announcement that a two-child limit will not be applied retrospectively. However, you could find yourself not having heard about another significant policy development, which will soon affect tens and potentially hundreds of thousands of older couples. On the evening of 14 January 2019, in a written ministerial statement given to the House of Commons at 7.20pm, and the day before the Brexit meaningful vote taking place, Pensions Minister Guy Opperman informed MPs that from 15 May 2019, mixed-age couples will both need to reach State Pension age in order to make a claim for Pension Credit. One cannot help arriving at a conclusion that the Department for Work and Pensions (DWP) were looking to bury something which they thought might generate some negative headlines.
A mixed-age couple is, as the name suggests, one in which one partner has reached State Pension age, whereas the other partner has not. Currently, a couple in this situation are able to choose whether to claim Pension Credit or Universal Credit. From a financial perspective, the choice is usually very straightforward – the standard Pension Credit rate for a couple is more than £7,000 a year more than equivalent amount under Universal Credit.
Currently, there are around 115,000 mixed-age couples claiming Pension Credit, Housing Benefit, or both. These couples will not be affected by this change initially, due to savings provisions. However, any break in these claims, even for a single day, could see entitlement lost completely and needing to reclaim would mean they would need to claim Universal Credit instead.
Further, from 15 May 2019, all new claims will have to be for Universal Credit, with both partners in the mixed-age couple being required to submit an online claim and manage an online account.1 The older partner will not be required to undertake work-related activity but the younger partner will be subject to full conditionality unless their work coach agrees to a relaxation.
Age UK has already been contacted by couples where the younger partner is providing care for the older partner and who are extremely concerned about both the financial loss and their ability to manage the work-seeking requirements whilst also maintaining care for their partner. Age UK has highlighted that this policy could produce the absurd situation where a single pensioner would be better off separating and living apart from their partner, due to the simple fact that Pension Credit for a single person pays more than Universal Credit does to a couple.
In response to this move, we’re aiming to undertake two interlocking activities. The first and most pressing is to try and highlight the change to couples who are potentially affected and encourage them to claim whilst they can. We know that underclaiming of Pension Credit is already a huge problem, with estimates of more than £3 billion not being paid each year. Anyone who does want to check whether they are entitled can use the Age UK benefit calculator which only takes about 10 minutes from start to finish.
Alongside this awareness raising, we’ll also be lobbying for the policy to be reversed entirely. We welcome Ms Rudd’s pledge to “tread cautiously,” when moving existing benefit claimants onto Universal Credit through its managed migration programme. However, given the well-publicised problems of implementation of Universal Credit already, it’s difficult to understand the motivation to suddenly and unexpectedly throw older mixed-age couples into the melting pot.
If the policy does go ahead, we’ll be pressing for consideration being given to higher personal allowances being payable for mixed-age couples, as already happens with the legacy benefits being replaced by Universal Credit. This would at least ameliorate some of the potential financial losses. And there’s a whole range of other more technical issues that do not appear to have been fully considered, which need clarification prior to implementation.
With State Pension age having now equalised between women and men, and then continuing to rise, to 66 years in 2020 and 67 years in 2028, it is inevitable that more and more couples are going to be affected by this change over time. The complete lack of public communications from DWP to date has worrying echoes of what happened with the WASPI women when pension ages were first increased and no-one wants to see a repeat of that situation.
To have your say on the #AgeGapTax, add your name to this Age UK petition.
Footnotes
1. Although note, due to Pension Credit and Housing Benefit for pensioners having up to 3-month’s backdating, the absolute last day for new claims is effectively 13 August 2019, provided the claimant can show they were entitled as of 14 May 2019.
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What a discrace this government is. A lot of mixed age couples will consist of one partner caring for the other like myself. I am nearly five years younger than my husband. I have put my life on hold to care for him. It is totally unfair to change the system and not recognise the older person , just the person under working age. This is very careless of the government as who will care for these older partners or relatives if the younger partner has to work just to make ends meet!
Another big mistake by the government to go along with all the others they have made on welfare .
Very worrying news. It is good to raise awareness on this problem.
The Pension Service wrote to us today to let us know what changes in circumstances would put my 69 year old husband and i over to UC
*if you leave “Great” Britain for more than 4 consecutive weeks
*if your household income or savings increase.
*if you or your partner move out of your home.
*if you move home into a new local authority area.
*if your or your partners entitlement to another benefit ends.
The letter is in regards to Housing Benefit.
Im guessing there will be less couples in our situation willing to risk a move to sheltered housing now so wont be freeing up social housing any time soon!
Thanks, very useful summary
Im 23 years younger than my husband who is 69 this year We are on PC and he has ischemic heart disease COPD and arthritis. He uses a mobility scooter due to the problems he has breathing and im his full time carer. This is very very worrying . Im the woman who started a thread on the Mumsnet Money Matters board. Thank you for raising awareness of this.
i hope Adult Social Services are going to be ready to deal with the consequences that will ensue.
because carer partners cant be in two places at once.