‘Stealth cut’ could leave couples £7,000 a year worse off, says Age UK

Changes to pension credit could leave some couples £7,000 a year worse off, Age UK has warned.

Earlier this week, the Government announced changes to benefits for mixed-age couples which will be introduced from May 15 2019.

Age UK said the change could leave “some of the poorest pensioners paying a hefty price for having a younger partner”.

It said the announcement had been made amid “Brexit distraction”.

The charity said the changes effectively mean some couples may find themselves in the “absurd position” of being financially better off if they split up and live apart.

It said this is because, once the change is implemented, the pensioner partner would, in many cases, be eligible for more money from their pension credit than they and their partner would get together from Universal Credit.

Amid #Brexit distraction, the Government have announced changes to #PensionCredit, meaning that mixed age couples could potentially lose out on £7000 per year. Read more: https://t.co/dbHHGyfIcZ pic.twitter.com/wQgw6XqVKe

— Age UK (@age_uk) January 16, 2019

At present, couples can claim pension credit of £255.25 per week if only one of them has reached state pension age.

But in future people in such circumstances may only be able to claim less-generous Universal Credit payments of around £115 per week, Age UK said – a difference which could add up to around £7,000 per year.

Caroline Abrahams, charity director at Age UK, described the change as “a substantial stealth cut”.

The changes were announced by the Government on Monday.

It said that, in 2012, Parliament voted “to modernise the system”, ensuring the younger partner is in the same circumstances as other people of the same age, regardless of the age of their partner.

Mixed-age couples with a partner under state pension age already in receipt of pension credit or pension-age housing benefit at the point of change will be unaffected while they remain entitled to either benefit, the Government has said.

But Age UK raised concerns that while “in theory” the change would not impact on existing claimants, if a mixed-age couple temporarily lose their eligibility for pension credit then from May 15 they could then “be thrown on to the Universal Credit regime, the problems of which are well-known”.

Ms Abrahams continued: “It is by no means unusual for one partner to be slightly older than the other within relationships and the bigger the age gap between them, the more long-lasting the adverse impact on them will be.”

In a written statement, Guy Opperman, Minister for Pensions and Financial Inclusion, said previously: “Pension credit is designed to provide long-term support for pensioner households who are no longer economically active.

“It is not designed to support working age claimants.

“This change will ensure that the same work incentives apply to the younger partner as apply to other people of the same age, and taxpayer support is directed where it is needed most.”