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This factsheet is a basic overview of pension credit. You can find out more detailed information in our Disability Rights Handbook, available at www.disabilityalliance.org/drh36.htm.
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Pension credit (PC), also known as state pension credit, is a benefit for people who are on a low income and have reached a certain age.
Pension credit has two parts:
You can get both of these parts if you satisfy the rules. If you get guarantee credit you can be passported to other benefits in a similar way to income support (IS). In some cases savings credit alone will be sufficient to do this.
To claim pension credit guarantee credit you must have reached the qualifying age at which women retire. This is being raised from 60 to 65 between 6 April 2010 and 6 April 2020. To check the qualifying age at the time you want to claim, contact The Pension Service (0800 99 1234), see leaflet PC1L Pension Credit or use the state pension age calculator on www.direct.gov.uk/pensions .
To claim pension credit savings credit you must be 65. If you have a partner (married, civil partners or living together as a couple), they can be younger than you.
You must also have the right to reside and pass the habitual residence test.
Unlike IS, PC claimants can work more than 16 hours a week.
To claim Pension Credit, you must
Present means physically present in the UK. There are specific rules that can allow you to be present during temporary absences. See the Disability Rights Handbook for further information.
The term "right to reside" is not defined but is dependent on your immigration status and nationality. You might have a right to reside under United Kingdom rules, EC law or because you are a British citizen.
The habitual residence test is a test to see if you normally live in the United Kingdom, the Channel Islands, the Republic of Ireland or the Isle of Man. The test will be applied if you have been living abroad.
There is no legal definition of 'habitual residence'. Relevant factors are where you normally live, where you expect to live in future, your reasons for coming to this country, the length of time spent abroad before you came here, and any ties you still have with the country where you have come from.
However, the test should not be applied if someone:
If these do not apply, a Decision Maker (DM) will decide whether you are habitually resident or not. Get advice if you fail this test.
PC can be paid for the first 4 or 8 weeks of a temporary absence from Britain.
Guarantee credit is calculated by comparing your appropriate minimum guarantee with your income. Your minimum guarantee always includes a 'standard minimum guarantee'. This is set at two rates: £137.35 for single claimants and £209.70 for couples. These figures are the same as the IS personal allowance and pensioner premium combined.
Additional amounts are paid for severe disability (£55.30 for each qualifying claimant or partner) and for carers (£31.00). You qualify for these in the same way as for the severe disability and carer premiums in income support. For more information on this see our Factsheet F45 - income support.
If you have children you will need to claim child tax credit (CTC). For more information on this see our Factsheet F9 - a guide to tax credits.
The appropriate minimum guarantee will also include any eligible housing costs, calculated in the same way as for IS.
You can get savings credit of up to £20.52 a week if you are single or £27.09 if you are part of a couple.
All assessments are based on the amount of qualifying income that you have over a threshold figure which is £103.15 for single claimants and £164.55 for couples. If your qualifying income is below these thresholds you cannot get savings credit.
Qualifying income is used when assessing your savings credit. For the most part the income that counts or is disregarded is the same as that used to calculate guarantee credit. However qualifying income also does not include:
If you have capital of more than £10,000 this will affect your pension credit. You will be counted as having an extra £1 a week income for every £500 (or part of £500) over £10,000. This is known as deemed income. There is no upper capital limit for pension credit. See the Disability Rights Handbook for more information.
You can claim in the following ways:
Pension credit can be backdated for up to 3 months if you have met the qualifying conditions throughout the whole period.
If you are going to become eligible for PC in the future - for instance because your 60th or 65th birthday is coming up or you are about to have a drop in income - you can make a claim up to 4 months in advance of this change.
If you are over the age of 65 you may be given an award that lasts for 5 years. This is known as the assessed income period (AIP). During this period annual adjustments will be made automatically for increases in your state and private pensions but you do not need to report changes such as increases in your savings or pension income.
During the AIP you do not have to inform The Pension Service of any changes in your ‘retirement provision’ (see below). Unless there are likely to be changes in the next 12 months that will affect your retirement provision, the AIP will normally be the maximum allowed.
Since April 2009, people aged 75 or over who apply for pension credit will normally be given an AIP that lasts indefinitely, and those whose AIP runs out after they reach 80 will not normally need to be reassessed.
You can get help and information at your local advice centre, such as a Citizens Advice Bureau. You can get more information about where to get personal advice from our Factsheet F15 - Finding a local advice centre.
You can also obtain a detailed factsheet on pension credit from the Age UK website at www.ageuk.org.uk.
This Disability Alliance factsheet is a basic introduction to pension credit. ou can find out more detailed information in Disability Rights UK's Disability Rights Handbook.
All our publications are available at www.disabilityalliance.org/shop.htm. You can also place an order by contacting Disability Rights UK on 020 7247 8776 (this is not an advice line) or by fax on 020 7247 8765. All our factsheets are available at www.disabilityalliance.org/fact.htm.
28 September 2011
