There are currently approximately 15,500 pensioner households (single pensioners or couples where both are State Pension age) in receipt of tax credits.
New regulations have been issued which provide for the migration of these claimants to either Universal Credit or Pension Credit, depending on their circumstances.
Invited to claim Universal Credit
From July 2024, claimants receiving Working Tax Credit or Working Tax Credit and Child Tax Credit will be invited to claim Universal Credit. A transitional element will be considered for qualifying claims.
Invited to claim Pension Credit
From July 2024, claimants receiving Child Tax Credit only, or those receiving either tax credit alongside Pension Credit will be invited to claim Pension Credit. A new transitional additional amount will be introduced to Pension Credit to ensure that claimants are not worse off at the point of claim.
As Universal Credit is not designed as a working-age benefit and Pension Credit is not designed as a benefit for those in work, the regulations make several changes to the normal rules for this cohort.
- The age rules for Universal Credit will be waived to allow State Pension age claims. The waiver can end (and Universal Credit terminated) in the same way that the transitional element ends, if earnings fall below the minimum earnings threshold, or if the claimant decides to claim Pension Credit.
- To align with Working Tax Credit, a minimum earnings threshold of 16 hours per week at National Minimum Wage will be introduced for Universal Credit. If earnings fall below this for 3 months after a grace period of 12 months then the Universal Credit claim will be terminated.
- State Pension age claimants will be exempt from the Benefit Cap, including when calculating the Universal Credit indicative amount for the purposes of the transitional element.
- Deferred private and State Pension income will be disregarded for 12 months for both Universal Credit and Pension Credit (or until claimed, if sooner).
- Deferring State Pension while in receipt of Universal Credit under these rules will not increase State Pension payable at a later date (unlike under Working Tax Credit, where a deferred State Pension increased in value).
Mixed-age couples
Separate regulations have also been issued regarding protected mixed-age couples in receipt of tax credits. Protected mixed-age couples are those who are entitled to an award of State Pension age Housing Benefit or Pension Credit despite not both being State Pension age.
Protected mixed-age couples in receipt of Working Tax Credit and Housing Benefit will be invited to claim Universal Credit. Separate provisions allow that after any Universal Credit claim has ended, protected mixed-age couples will be able to reclaim State Pension age Housing Benefit or Pension Credit. The regulations also allow that where a couple in this situation do not make a claim for Universal Credit, or make a claim but are not entitled, the protection remains that allows them to reclaim State Pension age Housing Benefit.
For the regulations, visit:
www.legislation.gov.uk/uksi/2024/611/made
www.legislation.gov.uk/uksi/2024/604/made
For the explanatory memorandum, visit: www.legislation.gov.uk/uksi/2024/611/memorandum/contents
Curtesy of www.welfare-benefits-unit.org.uk/
