FACTSHEET No. 11 Pension Credit (PC) This factsheet is a basic introduction to pension credit . 1. What is pension credit? Pension credit (PC), also known as state pension credit, is a benefit for people who are on a low income and have reached a certain age. Pension credit has two parts:
You can get both of these parts if you satisfy the rules. If you get guarantee credit you can be passported to other benefits in a similar way to income support (IS). In some cases savings credit alone will be sufficient to do this. 2. Who can claim pension credit? To claim pension credit guarantee credit you must have reached the qualifying age at which women retire. This is being raised from 60 to 65 between 6 April 2010 and 6 April 2020. To check the qualifying age at the time you want to claim, contact The Pension Service (0800 99 1234), see leaflet PC1L Pension Credit or use the state pension age calculator on www.direct.gov.uk/pensions . To claim pension credit savings credit you must be 65. If you have a partner (married, civil partners or living together as a couple), they can be younger than you. You must also have the right to reside and pass the habitual residence test. Unlike IS, PC claimants can work more than 16 hours a week. 3. The habitual residence test and the right to reside The term "right to reside" is not defined but is dependent on your immigration status and nationality. You might have a right to reside under United Kingdom rules, EC law or because you are a British citizen. The habitual residence test is a test to see if you normally live in the United Kingdom, the Channel Islands, the Republic of Ireland or the Isle of Man). The test will be applied if you have been living abroad. There is no legal definition of 'habitual residence'. Relevant factors are where you normally live, where you expect to live in future, your reasons for coming to this country, the length of time spent abroad before you came here, and any ties you still have with the country where you have come from. However, the test should not be applied if someone:
If these do not apply, a Decision Maker (DM) will decide whether you are habitually resident or not. Get advice if you fail this test. PC can be paid for the first 4 or 8 weeks of a temporary absence from Britain. 4. Guarantee credit Guarantee credit is calculated by comparing your appropriate minimum guarantee with your income. Your minimum guarantee always includes a 'standard minimum guarantee'. This is set at two rates: £137.35 for single claimants and £209.70 for couples. These figures are the same as the IS personal allowance and pensioner premium combined. Additional amounts are paid for severe disability (£55.30 for each qualifying claimant or partner) and for carers (£31.00). You qualify for these in the same way as for the severe disability and carer premiums in IS. If you have children you will need to claim child tax credit (CTC). The appropriate minimum guarantee will also include any eligible housing costs, calculated in the same way as for IS. 5. Savings credit You can get savings credit of up to £20.52 a week if you are single or £27.09 if you are part of a couple. All assessments are based on the amount of qualifying income that you have over a threshold figure which is £103.15 for single claimants and £164.55 for couples. If your qualifying income is below these thresholds you cannot get savings credit. 6. Qualifying income and savings credit
7. Capital If you have capital of more than £10,000 this will affect your pension credit. You will be counted as having an extra £1 a week income for every £500 (or part of £500) over £10,000. This is known as deemed income. There is no upper capital limit for pension credit. See the Disability Rights Handbook for more information. 8. How to claim You can claim in the following ways:
Pension credit can be backdated for up to 3 months if you have met the qualifying conditions throughout the whole period. If you are going to become eligible for PC in the future - for instance because your 60th or 65th birthday is coming up or you are about to have a drop in income - you can make a claim up to 4 months in advance of this change. If you are over the age of 65 you may be given an award that lasts for 5 years. This is known as the assessed income period (AIP). During this period annual adjustments will be made automatically for increases in your state and private pensions but you do not need to report changes such as increases in your savings or pension income. During the AIP you do not have to inform The Pension Service of any changes in your ‘retirement provision’ (see below). Unless there are likely to be changes in the next 12 months that will affect your retirement provision, the AIP will normally be the maximum allowed. Since April 2009, people aged 75 or over who apply for pension credit will normally be given an AIP that lasts indefinitely, and those whose AIP runs out after they reach 80 will not normally need to be reassessed. 9. Where can I get help with claiming? You can get help with filling out your Pension Credit form at any local advice centre, such as the Central Africa’s Rights and AIDS (CARA) Society or any citizen’s advice bureau. You can also get more information about the benefits mentioned on our website at www.cara-online.org. Much of this information is contained in factsheets available at www.cara-online.org. You can also obtain copies of these factsheets/publications by contacting CARA, 18 - 22 Ashwin Street, Dalston, Hackney, London E8 3DL United Kingdom - Tel: +44 (0) 844 478 0015 -Mob: +44(0) 795 695 2645 -Fax: +44(0) 872 115 8436 -Email: info@cara-online.org Updated 8 April 2011 |