DWP to merge two key benefits as it gives update on plans that will affect millions
THE Department for Work and Pensions will merge two key benefits as it issues an update on its plans that will affect millions of claims.
The shake-up will combine pension-age housing benefit and pension credit into a single benefit, and the plans are now moving forward.
The move, first mooted in 2011 but repeatedly delayed, will see those over 66 receive a single, unified benefit, simplifying the system and potentially boosting uptake.
However, progress is now being made and the DWP has signed a deal worth almost £1million with tech giant IBM to advise on the digital transformation required for the merger.
The four-month contract, which could be extended, will see IBM’s online customer experience specialists help design the new system.
This involves mapping out the current process and working with stakeholders to create a more user-friendly experience.
The merger is part of a wider government effort to simplify the benefits system.
Ministers hope the merger will ensure more pensioners receive the financial support they’re entitled to.
An estimated 760,000 eligible pensioners are currently missing out on pension credit, worth an average of £3,900 a year.
This extra income is more vital than ever following changes to the winter fuel payment.
This is because only pension-age households receiving certain benefits, including pension credit, are eligible for the payment.
It is hoped the new merged pension credit and housing benefit system will be in place from 2026, two years earlier than previously planned.
While housing benefit is being phased out for most working-age claimants and replaced by Universal Credit, it remains available to pensioners.
For the time being, claimants who think they’re eligible should make individual claims for each of the benefits.
What is pension credit?
Pension credit tops up your weekly income to £218.15 if you are single or to £332.95 if you have a partner.
This is known as “guarantee credit”.
If your income is lower than this, you’re very likely to be eligible for the benefit.
However, if your income is slightly higher, you might still be eligible for pension credit if you have a disability, you care for someone, you have savings or you have housing costs.
You could get an extra £81.50 a week if you have a disability or claim any of the following:
- Attendance allowance
- The middle or highest rate from the care component of disability living allowance (DLA)
- The daily living component of personal independence payment (PIP)
- Armed forces independence payment
- The daily living component of adult disability payment (ADP) at the standard or enhanced rate.
You could get the “savings credit” part of pension credit if both of the following apply:
- You reached State Pension age before April 6, 2016
- You saved some money for retirement, for example, a personal or workplace pension
This part of pension credit is worth £17.01 for single people or £19.04 for couples.
Claims for pension credit also open doors to a number of freebies and discounts.
For example, pension credit claimants over 75 qualify for a free TV licence worth up to £169.50 a year.
Claims for the benefit also provide eligibility to £25 a week cold weather payments and the £150 warm home discount.
The deadline to apply for pension credit and qualify for this year’s winter fuel payment is December 21.
How do I apply for pension credit?
YOU can start your application up to four months before you reach state pension age.
Applications for pension credit can be made on the government website or by ringing the pension credit claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you’ll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to (usually three months ago or the date you reached state pension age)
You can also check your eligibility online by visiting gov.uk/pension-credit first.
If you claim after you reach pension age, you can backdate your claim for up to three months.
What is pension-age housing benefit?
Housing benefit can help you pay your rent if you’re unemployed, on a low income or claiming benefits.
Around 1.1million pensioner households currently claim housing benefit, according to the latest government figures.
The benefit is for pensioners who pay rent, are on a low income and have savings under £16,000.
The average claim is worth around £4,338 a year.
If a pensioner claims the guarantee credit part of pension credit, their income and savings aren’t taken into account.
New claims for housing benefit are strictly reserved for those over the state pension age.
Universal Credit‘s housing element has replaced housing benefit for those under 66 years old.
However, 300,000 pension age households are eligible for housing benefit but aren’t claiming it, according to Policy in Practice.
If you’re over state pension age and live with your partner you can make a new claim for Housing Benefit if any of the following apply:
- You and your partner have both reached the state pension age
- One of you has reached State Pension age and started claiming pension credit (for you as a couple) before May 15, 2019
- You’re in supported, sheltered or temporary housing
Usually, you will not get housing benefit if:
- Your savings are over £16,000 – unless you get guarantee credit of pension credit
- You’re paying a mortgage on your own home – you may be able to get Support for Mortgage Interest (SMI)
- You live in the home of a close relative
- You live with your partner and they are already claiming housing benefit
- You’ve reached the state pension age but your live-in partner has not – unless you had an existing claim as a couple before May 15, 2019
You may get help with all or part of your rent with housing benefit payments.
It’s calculated using a number of different factors, including your rent rate, what type of housing you live in, and personal circumstances including your household income.
We’ve previously explained how your payments will be calculated.
How do I apply for housing benefit?
YOU can apply for housing benefit directly with your local council.
Find yours by visiting gov.uk/apply-housing-benefit-from-council.
You can also apply for housing benefit as part of a pension credit claim.
You’ll need to provide some information and evidence to support your claim for housing benefit.
You’ll get housing benefit faster if you have this available when you make your claim.
You’ll need to know:
- How much rent you pay
- Whether anything else is included in the rent, such as water, gas or electricity charges
- If you pay any service charges, including building maintenance or insurance
- Your landlord or agent’s details
Find out more by visiting gov.uk/housing-benefit.