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Last Updated: Monday, 6 October, 2003, 11:28 GMT 12:28 UK
Pension Credit answers
The government's new flagship benefit for pensioners starts on Monday - but working out whether you are entitled to the new credit can be rather puzzling.

The new credit could be a real boost for a pensioner living on a low income, but how will it work - and who will qualify?

BBC News Online put some of your questions on the new benefit to Age Concern, Help the Aged and the Pensions Advisory Service.

Answered by Malcolm McLean, chief executive of the Pensions Advisory Service:

Q: My mother is 83 and her only income is the basic state pension based on my father's NI record. She does not claim any additional State Benefits as she has always felt that her savings are too high - I believe she has around 20k in savings. Can she claim the new credit?

A: Income from savings is taken into account in the calculation for Pension Credit not as actual income but on the basis of an assumed rate. Pension Credit assumes an individual is earning an income of 1 a week for every 500 (or part of 500) saved after the first 6,000 (10,000 if you are in a care home).

On savings of 20,000 a weekly income of 28 will be assumed (20,000 - 6,000 = 14,000 divided by 500 = 28)

This would be added to her state pension and if the total exceeds 139.10 a week, she is unlikely to be entitled to the Pension Credit. If her income is lower than this, she should certainly make a claim for Pension Credit.

Q: I am writing concerning my Mother. She is 80 and in a nursing home that costs over 25,000 per year. Her Pensions total about 11,000 so she has to use remaining savings to pay the shortfall of 14,000 per year. Is she entitled to additional Pension Credits?

A: Based on the information provided, and her pension totalling about 11,000 a year (211 a week), I'm afraid that your mother's income exceeds the limits for qualification of the Pension Credit.

But, if you feel you may still be eligible, contact the claimline on 0800 991234.

Q: I applied for this for my mother who is permanently in a care home. It was rejected but they deducted 6000 from here savings rather than 10,000 I would like further guidance.

A: If your mother is permanently in a care home, then the higher savings disregard of 10,000 should apply (see above).

Whether or not she qualifies for Pension Credit depends on the type and extent of her other income.

Having appealed, you can now only await the Pension Service's decision.

Q: My partner is a pensioner on 77. Will she receive the 24 or will my circumstances affect it. I am in full employment.

Need help claiming?
Help the Aged's Senior Line: 0808 800 6565 or text phone 0800 269626 (for hearing impaired people) Monday to Friday 9.00am - 4.00pm
Pension Credit claimline: 0800991234
Age Concern's Information Line: 0800 00 99 66, seven days a week from 7am to 7pm.
Pensions Advisory Service helpline: 0845 6012923

A: In the case of a couple, income and savings are assessed jointly. It therefore depends on the level of your earnings whether Pension Credit can be obtained. If you are in doubt, you should contact the claim line on 0800 991234.

Q: My mother-in-law (aged 90yrs) lives with my wife and I in our home. She has a state pension and a modest pension from her late husband's former employers. Will she qualify for the Pension Credit?

A: It depends on the level of her income and any savings that she may have. The fact that she lives with you and your wife would not however disadvantage her.

She should contact the claim line on 0800 991234.

Q: I am divorced. I get 122.26 state pension and 19.50 from my company pension per week . So I do not think I am entitled to anything?

A: If the reader is aged over 60 and under 65, from the information provided, it is unlikely that he would be entitled to the Guarantee Credit part of the Pension Credit as his total weekly income (141.76) exceeds the standard minimum level for a single person of 102.10 a week.

However, if he is 65 or over, he may be entitled to the Savings Credit element.

This rewards those people who have made provision for their retirement with a modest income or savings.

He is likely to be entitled to the Savings credit if, as a single person, his total weekly income is less than 139 a week.

If in doubt, contact the claimline on 0800 991234.

Q: Many pensioners will struggle to fill in these complicated forms, and may not claim at all - these are the people who need the money most. Why not have a reasonable basic pension for everyone, with no means testing?

A: It is a fact that elderly people do not like means-tested benefits and are often too proud to claim them. Given a choice, I suspect the majority of pensioners in this country would probably prefer to see the extra government money that is being put into Pension Credit is used to fund an increase in the basic state pension. Spread over 11m pensioners, I am not sure, however, how much difference this would make to the rate of the basic pension and it would still mean many people having to claim top-ups in one form or another.

It must be emphasised that for those who satisfy the qualifying conditions, Pension Credit is an entitlement - not a handout or a form of charity.

There is no need to struggle to fill out complicated forms as you can telephone the application helpline and an operator will complete the form for you.

Q: Will it be worth claiming if a pensioner currently receives 100 a week state pension and has savings of 50,000?

Income from savings st taken into account in the calculation of the Pension Credit not as actual income but on the basis of an assumed rate. Pension Credit assumes an individual is earning an income of 1 a week for every 500 (or part of 500) saved after the first 6,000 (10,000 if you are in a care home).

Based on the information you have provided, and on savings of 50,000, a weekly income of 88 will be assumed (50,000 - 6,000 = 44,000 divided by 500 = 88).

Added to your state pension of 100 a week, this will produce a total weekly income of 188.

On this level of income, I am afraid that you will not qualify for any pension credit.

But, if in doubt, contact the claimline on 0800 991234.

Q: My 85 years old mother refuses to claim Pension Credit as she says that she will not be any better off as she will lose her rent and council tax rebates. Can you explain if this is so? Her only source of income is her state pension of approximately 75 a week.

A: Based on the information you have submitted, I do not think this is correct. The government is introducing changes in the Housing and Council Tax Benefit rules from October 2003 to mirror the rules on the treatment of income and capital in Pension Credit.

Therefore, receiving Pension Credit should not cause your mother to lose her rent and Council Tax rebates.

She should be encouraged to make a claim for Pension Credit as soon as possible.

Q: I have filled in the new form. How and when will I know about my new benefits and how can one determine if it is correct?

A: Having completed a claim form, the Pension Service should confirm when the first payment will be made and how much it is for.

Payment will be backdated to 6 October 2003 or to the date of entitlement, if later.

If you have some reason to believe that the assessment of your claim may not be correct, you should take this up in the first instance with the Pension Service. Alternatively, your local Citizens Advice Bureau (CAB) should be able to help you check the facts.

Q: Am I right in thinking that pensioners who have spent their earnings and only saved a small amount during their working lives, will be rewarded by an extra 14.79 per week but those who have done without to provide themselves with savings or extra pension will not be rewarded?

A: What makes Pension Credit different from its predecessor, the Minimum Income Guarantee (Mig) is that people who have saved a moderate amount for their old age are rewarded and not penalised for having done so.

This is the rationale behind the Savings Credit element which, as you indicate, can provide up to a maximum of 14.79 a week for a single person.

The reality is that the government has to draw a line somewhere and beyond a certain level, the value of savings has to be taken into account.

Q: Is it true that a couple with a weekly income greater than 155.80 per week will receive nothing from this benefit regardless of whether this income is made up of company pensions or interest on savings?

A: It is true that a couple with a weekly income greater than 155.80 comprising of company pensions and income from savings would not qualify for the Pension Credit.

I should point out, however, that it is not the actual interest on the savings that is taken into account. The first 6,000 of total savings is ignored and thereafter an income of 1 a week for every 500 (or part of 500) is assumed.

But, if you feel you may be eligible, it could be worth contacting the Pension Credit claimline on 0800 991234.

Answered by Sally West, policy officer at Age Concern:

Q: My Mother is 78 and lives in a care home. Her savings are less than 10,000, therefore will she be eligible to this Pension Credit and how do I claim on her behalf?

A: If she had already been getting MIG/Income support then she wouldn't need to claim as pension credit will be worked out automatically. If your mother is unable to claim herself, you must have the power of attorney to claim on her behalf - for further advice call the pension credit helpline number. If the local authority is providing financial support the maximum amount of savings credit someone will be able to keep is 4.50. In terms of her topping up fees she may want to seek advice form a local agency.

Q: After working for more than fifty years I have been told that I do not qualify for benefits and I receive only 130 per week to support myself and my wife. Fortunately I sold our house for an enormous price, I couldn't afford the Council Tax in the UK and now live in France.

A: Pension credit being an income-related benefit is not available to people living abroad. Income-related benefits are different to contributory benefits such as the state pension which are paid on the same basis to someone living in another EU country.

Q: I am receiving a pension of 157 per month and am working full time. I become 65 on 01/02/05. My husband will turn 60 on 4/5/04. Would be able to get tax credit?

A: Pension credit is based on the joint income and savings of a couple. Being in work full-time does not in itself prevent someone from claiming pension credit although earnings (other than a small amount that is ignored) are assessed. It would therefore depend on your joint savings income and other circumstances.

Q: If there are any other persons living in the same home as the pensioner couple, does that individuals monthly earnings require to be taken into account?

A: In general the income of someone else in the same household would not be taken into account when assessing pension credit. However the people in a household and their income can affect the help that people get towards housing costs , e.g. any help such as mortgage interest paid with pension credit or housing benefit or council tax benefit.

Q: How will this new Pension Credit help those British Pensioners living in the Old Colonies to survive on their meagre British Pensions?

A: Unfortunately not, please see answer above.

Q: In 1989 I remarried and remain married. However, If I had lived with my partner (six years younger than I) and not married him I believe at age 60 (2004) I would have been entitle to the 102 pw?

A: For pension credit, a couple is assessed jointly. However this applies both to a married couple living together or an unmarried couple of opposite sexes living together so a cohabiting couple are no better off.

Questions answered by Help the Aged.

Q: We have our elderly mothers living with us in Spain. Are they entitled to receive the Pension Credit? If not is this not a breach of European Law which says equal pensions must be paid to all a particular Countries citizens whether they reside in their "home" Country or elsewhere within the EU?

A: Pension Credit (Guarantee Credit and Savings Credit) is a mean tested benefit, not a pension or a tax credit. One of the criteria for receiving this benefit is that the applicant is resident in the U.K. The Guarantee Credit element is replacing the Minimum Income Guarantee and the government does not pay this benefit to pensioners living abroad. Help the Aged has no plans to raise this particular issue with the Government at the moment.

Q: What is the maximum savings and monthly income in any form a pensioner can hold, excluding their main residence, before they are exempt from being eligible?

A: There is no maximum level of savings or income, because there are various possible combinations and the value of the property that people live in is disregarded. A pensioner could have a very small pension and considerable savings and still be eligible. Another example: if someone was in receipt of Attendance Allowance, this would have an impact and they could have a higher income and still qualify for Guarantee Credit.

The views expressed are solely those of Age Concern, Help the Aged, and the Pensions Advisory Service and are for general guidance only. They do not constitute financial advice as defined by the Financial Services Act and should not exclude anyone who feels they may be eliglbe from applying for the Pension Credit.

Are pensioners getting a fair deal?
06 Oct 03 |  Have Your Say

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