Department for Work & Pensions  

DWP accused of ‘stealth’ change to pension credits

DWP accused of ‘stealth’ change to pension credits

The Department for Work and Pensions has been accused of creating an "accident waiting to happen" after it quietly announced a major change to how couples claim pension credits.

Late on Monday, January 14, pensions minister Guy Opperman announced that new pensioners whose partners are younger than the state retirement age of 65 can no longer claim a pension credit.

"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," he said in a written ministerial statement.

Under the new rules, introduced from May 15, pension age partners will be forced to claim working-age benefits alongside their younger partners.

When single people reach state pension age, they move from working-age benefits to pension age benefits. Until now, couples have been able to choose to move to pension age credits when the older partner reaches pension age, but this option has been eliminated under the new rules.

Age UK said this could affect the poorest pensioners the hardest, with mixed-age couples potentially losing out on about £7,000 per year.

Stephen Lloyd, independent MP for Eastbourne, said the changes were cynical and could lead to bad outcomes for retired people, adding that the announcement was timed to coincide with when attention was focused on Brexit.

He said: "I think it tells us a lot about how this government believes the news would be received by retired people up and down the country, that they snuck their announcement out at 7:20pm on Monday evening. Just when most of Westminster is fixated with Brexit.

"I have written to the pensions minister seeking urgent clarification. The cack-handed government must not be allowed to bury bad news by surreptitiously releasing it when the bedlam caused by their own Brexit incompetence is at its height."

Caroline Abrahams, charity director at Age UK, said: "Make no mistake, this is very bad news for everyone affected. It’s a substantial stealth cut – a couple claiming in the future could receive £140 less per week than an older mixed couple claiming before the change comes in."

Age UK said that, although in theory the change will not affect existing claimants, if a mixed-age couple temporarily loses their eligibility for pension credit, then from 15 May they will be unable to regain it and will be put onto the universal credit regime.

It said the change effectively meant many pensioners might find themselves financially better off if they split up and live apart from their partner.

The charity said: "This is because once the change is implemented, the pensioner partner will, in many cases, actually be eligible for more money from their pension credit than they and their partner will get together from universal credit."

The DWP has been approached for comment.