Why the Government is wrong to change the pension credit rules

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Blog written by Caroline Abrahams, Charity Director, Age UK

It was early Monday evening: darkness had fallen and in Westminster all attention was on the ‘meaningful vote’ in Parliament the following day. On College Green the media tents were being erected and ‘beyond the bubble’ the news bulletins contained little other than speculation about how the vote would turn out.

This was the moment chosen by the Department for Work and Pensions to ‘announce’ that they intend to implement what some have dubbed ‘the toy boy tax’ in four months’ time – the effect of which is to debar a pensioner of either gender from claiming pension credit until their partner, whether male or female, also attains their own state pension age. The mechanism they chose was to lay a Written Ministerial Statement in Parliament, the most understated communication channel available to governments. The title was innocuous too – ‘Pensions Update’.

Yet if it is brought in on May 15th, as the Government intends, this measure will slash the incomes of the couples affected who claim Pension Credit in the future, by up to £7,000 a year in the worst cases, compared to current rules. In addition, although in theory this only applies to future claimants it will actually also hit any pensioner in a mixed age couple currently in receipt of pension credit whose claim is interrupted.  This policy change, therefore, has massive ramifications, yet the decision was made to ‘sneak’ it out – presumably in an effort to ‘bury bad news’.

Why does this make so much difference to people in these situations? Because pension credit is only available to pensioners on a very low income and if they claim it it usually makes the difference for them between living below or above the poverty line. In fact pension credit is the single most important poverty alleviation mechanism for older people that we have in this country and now the Government has apparently decided to withdraw it from those who happen to have a younger partner.

The consequences are huge because the pensioner partner will, in many cases, actually be eligible for more money from their pension credit than they and their partner can get collectively as a couple from universal credit. This may seem bizarre but it is the result of working age benefits being set so low. The Government’s rationale for this is that it provides a strong incentive for people of working age to get a job; whether you agree with this idea or not the fact is though that Universal Credit was never designed for people who have reached pension age, who are by definition not of working age.

In fact, this policy change has been something of an unexploded bomb, ticking away on the statute book since 2012 but never actually put into effect. At Age UK we hoped that this would continue to be the case for the foreseeable future, given the very serious impact on the individuals and couples involved, of which the Department for Work and Pensions is fully aware. I am very sorry to say that we were wrong and this unexpected change of tack appears to be a decision made by the incoming Secretary of State, Rt Hon Amber Rudd MP.

The measure itself threatens to be devastating for anyone affected and pensioner poverty is likely to increase as a result. In fact a trend towards rising pensioner poverty had already started to emerge in the last two years, after a lengthy period in which it had reduced; this will intensify it.

It seems totally unfair that as a result of this policy change two pensioners in identical financial circumstances stand to receive such different sums of money to live on by the State, simply because one has a partner of pensionable age and the other a partner who is younger. The bigger the age difference the more long-lasting the impact will be.

What’s more, this measure gives a strong incentive to pensioners in these mixed age couples to split up from their partner and live apart from them – a £7000 difference in annual income when money is really tight is so significant that people will surely be unable to dismiss this out of hand.

So much for supporting families, and the informal caring arrangements that are often going on in them among people in the age group affected – these principles are apparently to be sacrificed.  And for what? One can only conclude that the motivation is to cut costs, regardless of the impact on the people concerned. In this regard it is also worth considering that many who will be caught by the policy change are likely to be women born during the 1950s – precisely the group who have been impacted by other government decisions to raise the state pension age – the ‘Waspi generation’. Anyone hit by this ‘double whammy’ will be entitled to feel especially aggrieved.

This policy change is then it seems really a stealth tax on ageing couples on low incomes. Of all the members of our older population they are among those least likely to be able to sustain a big cut in their incomes without experiencing real hardship. At Age UK we therefore strongly oppose it and we are also surprised and disappointed that the Department for Work and Pensions tried to slip it out under the cover of this week’s Westminster turmoil.

We call on the Government to change their minds.

22 thoughts on “Why the Government is wrong to change the pension credit rules”

  1. What about the 1950s women who live alone, the single women and widows, they are far worse off than couples, they have no partner to financially support them and have never been able to claim pension credit since they were unfairly hit by 2 state pension age rises. They are being harassed onto Universal credit and then bullied into job seeking right up to 65/66 years old even with age related complaints. Just one example, we have a 62 year old woman in our group who is in ill health, living on £73 a week UC, her own doctor called her a ‘frail old lady’ yet the DWP have decided she is fit to work! She lives in dread of being sanctioned! Please don’t forget them, ask the government to change their minds about these women too.
    Ruth (co-founder of The Protest Against The 2011 Accelerated State Pension Age Increase group)

  2. Your facts are slightly out.

    The changes will not hit any pensioner in a mixed age couple currently in receipt of pension credit. If you already get Pension Credit and you’re in a couple, you’ll continue to get Pension Credit after 15 May 2019. If your entitlement stops for any reason, for example your circumstances change, you cannot start getting it again until you (or your partner) are eligible under the new rules. Ref http://www.gov.uk/pension-credit/eligibility

    It might be prudent to rework your blog so that people aren’t unnecessarily alarmed.

    1. yeh them who already get it keep it, its alright for some, not the womens fault but how can us without a man not feel its heaping even more unfairness on us

      1. Dear Suzy Albright and Rose Thorne, Admin GREY SWANS. Any pensioner with a wife below the risen pension age, is hit by this change, that came from the Welfare Reform Act 2012. If your pension credit claim is interrupted by up to a month and over, then the pensioner husband is deemed a new claim and is dumped, along with the wife, onto the lower and frozen Universal Credit. So it is alarming for pensioner husbands with younger wives below the risen pension age.

  3. This was done by the Government in the same way as the pension age rises for women. All women.
    No widespread knowledge of these rises were broadcast, all done stealthily and very few of us personally notified.I have been working since the age of 15, now it just isnt possible , due to Rheumatoid Arthritis.
    I am a widow ( no widows pension) and also born in 1954. Making my now retirement date in January 2020. 5 years and 9 months more than my anticipated retirement age of 6o.
    The cruelty handed out to pensioners is beyond comprehension. So much hardship and suffering amongst the elderly , and each time it’s us they hit with their disgraceful policies. They are now causing a major problem with people of our age in marriages or contemplating marriage, as to having to consider the financial consequences if its a younger person.
    Beggars belief. So much for the Golden years. R.i.P Britain, thanks to the heartlessness of our Government !

  4. This Tory Government is absolutely disgraceful. I have already had to wait 5 years 7 months for my state pension. I will now get this on 6th January 2020. Us 1950 ladies have already lost up to £40,000 and then they hit us again. Discrimination on a small cohert of women- not once but twice. Typical sneaky to hide this away just like they did our pension changes. This Government have learned nothing!😡

  5. Dear Caroline Abrahams, Admin GREY SWANS pension activist group into Labour’s election manifesto. Includes demand for Basic Living Income age 50 to 59 for men and women with no works pension, who fall out of work, and age 50 full works pension payment and state pension payment age 60 men and women.
    Pension Credit was cut in 2012-2013 to the I Daniel Blakes from age 60 to 66, by women’s pension age rise losing men from 60 the ability to new claim Pension Credit. From 2012-2013 women lost state pension AND lost pension credit as well, when men and women least chance of a new job from age 60. Since 2013, meant around 100 per cent rise in men and women from age 60 on benefit (JSA / ESA now horrific Universal Credit) – Source Parliamentary Briefing.
    Pension Credit overtaken by Universal Credit has already happened in some areas for new claimants.

  6. Ex nurse, long term agency as single mum which worked for me, as any childcare avail had to be paid for, which I did, having 3 jobs most of the time, born 1954. Ankle replacement, 2 lousy knees, creaky hip, falling bladder. This all due to acute physical work, which is all I still do, low paid retail and now 2nd job housekeeping to try and survive. My son works, lives with me, contributes, but still cant afford all bills( me that is) Wouldn’t consider uc, it is a heinous system that gives nothing. They want to destroy the pension scheme. I am part of #backto60. I left nursing due to caring for family members, exhaustion and the dear nhs being destroyed. I am existing on car boots, sheer determination and guile. This has been the worst 4 years ever. I cannot have my repair op as even though have 48 yr’s ni contributions, it depends on the last 2!!!! Work that out, I could not afford to be off!! They only give us the menial jobs, doesn’t matter what you did before, only sit down work if internet savvy, I know the basics but that is insufficient. Most work avail is short term too. Beyond disgusting, I’m single thank god, but this now will destroy so much, which is what they have been doing for years. HELP

  7. I understand why Waspi women are very upset but why does everyone think the harm is limited to them as far as women’s pensions are concerned? I was born in 1961 and my pension age is now apparently 67. I feel just as hard done by as the Waspi women but people just slightly younger never seem to warrant a mention. This pension credit decision is truly diabolical aswell.

    1. Hi Mellisa, join the Waspi group, they are fighting for everyone now.
      The court case in June will discuss not just 50s ladies, and could hopefully alter the whole pension system for women and men .
      You will also be kept up to date with what’s happening. We need as many names as we can, the more we are , the more chance we all have.
      P.s.im not admin of a group, just a lady behind the fight to alter this disgraceful treatment of pensioners

      1. Hi Julia, thanks for that info, I didn’t realise I could join in with the Waspi women so I will do that now. Hopefully something will be done 🙂

      2. Dear Julie Bough and Melissa, Admin GREY SWANS is precisely the pension activist group into Labour (who brought about Pension Credit) that is for EVERY pensioner age bettered state pension money, is for pension age 60 men and women so helps the 1960s born about to start turning 60 from next year, and UK citizen living here or anywhere else in the world. To forever end pensioner poverty, that especially hits women but does hit men.

        WASPI is not the BackTo60 pension group’s Judicial review that has begun.

        WASPI is a parallel maladministration court case to the BackTo60 one that will also begin, I suppose (?) once BackTo60’s Judicial Review’s unlikely event of not winning full restitution compensation to all 1950s born ladies back to age 60 of state pension payment denied.

        WASPI was only about the maladministration court case and never about the poverty (and high death rate) caused by pension age rise, that is the sole purpose of the top up of low income of Pension Credit.

        Pension Credit is lost to men and women alike from age 60 because of women’s pension age rise denying both Pension credit since 2012-2013 onwards, now including the pensioner husband (within the Welfare Reform Act 2012 and now coming into being as the horrific Universal Credit is rolling out nationally and is already for ALL new claimants, and any interrupted for over a month Pension Credit which then makes it a new claim, cannot and put on the frozen and lower Universal Credit).

  8. So all along its been discriminating against us who havent got a husband or partner. A woman same age as me 63 who is lucky enough to have an older husband who gets his state pension has been able to sit back while he gets pension credit for her and not worry about dragging herself to work. Them already on it can stay on it. My body aches with working all my life and doing home care looking after folk not much older than me. When I cant do it any more Ill be forced to scrounge for benefits and get assessed and have to find another job. Where at? Who wants a workworn woman of over 60. They should be letting me and women like me get pension credit like them with partners can or at the very least leave us alone to manage on the £73 a week unemployed get but no we have to work or beg to 66 because we got 6 years of our pension stolen. Ive brought up 2 kids on my own after he left us and always worked but we get no thanks do we just unfairness heaped on top of unfairness. Supposed to be about equality well us born in the 1950s never had it and still dont

  9. The government don’t listen to the people,so we shouldn’t listen to them, every county in the u.k. don’t vote for this awful evil Tory government, it’s always the poor on benefits they target. Never themselves. And there millionaire’s
    Times over.

    1. I couldnt believe people voted them in again Brian or some didnt bother to vote and helped them get back in like with the help of the dup they gave us taxpayers money to Even some of the ones theyve made to suffer didnt vote labour, it didnt make sense

  10. Admin GREY SWANS is a pension activist group into the next Labour government, so into Labour’s election manifesto now. Only change of government has achieved lowered pension age in European nations, where EU government does not rule EU member states’ state pension money or age. Poland and Italy to date have lowered state pension age.

    1. Labour will be lucky to ever get into power again. Ive seen your posts and even if they did get into power how ever could they make the state pension age 60 for women and men and £250 a week. Us 1950s women are only some of the people suffering from tory austerity along with the sick and disabled and unemployed how selfish it would be to expect a labour government to prioritise us they just couldnt do it .I and I bet other 1950s women struggling would be happy for any help like bringing back pension credit or something like it for us worried sick how well manage to 66 so we would know if we cant manage to work we wont get bullied at job centres like women do

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