UC is a working age benefit. Once a UC claimant hits their State Pension age for benefit purposes they are no longer entitled to working age benefits, therefore their UC award should end and they can claim pension age benefits instead; ie Pension Credit and Housing Benefit.
There is a special provision which allows UC to continue to be paid for the final Assessment Period in which someone reaches State Pension age, and not be affected by any Pension Credit or Housing Benefit they start to receive in that month.
NOTE: there are special rules for couples - click here.
But the DWP do not always pick up on this significant date and are continuing to pay Universal Credit incorrectly to people who have reached State Pension age.
We have seen examples of this happening, even when DWP are aware that the claimant is receiving their state pension (which reduces the Universal Credit award pound for pound as unearned income).
What are the implications?
Universal Credit continuing in payment – and the claimant not realising they need to claim Pension Credit / Housing Benefit instead - will not only mean that the claimant is losing out on the higher premiums in Pension Credit and Housing Benefit, but they may also see a gap in benefit entitlement and they will likely have to repay the overpaid UC.
Example
Miguel turned State Pension age on 27th August 2023. His UC Monthly Assessment Periods run from 6th of one month to 5th of the next. When Miguel turned State Pension age his UC award should have stopped. He’s not entitled to any UC after the MAP 6th August – 5th September.
BUT UC continues to be paid – taking Migel's state pension into account as income.
If UC had ended and informed Miguel, he would have known to seek advice and to claim Housing Benefit and Pension Credit. Those benefits could start from 27th August,.
When DWP eventually realise that Miguel is pension age his UC award will end. And DWP will create an overpayment back to 6th September.
Miguel can then claim Pension Credit and Housing Benefit and request a backdate – both benefits can be backdated 3 months automatically.
So if UC had continued in payment for longer than 3 months, UC would raise an overpayment for the whole period but Pension Credit and Housing Benefit would only be able to go back 3 months.
Can the claimant challenge any resulting overpayment?
Most UC overpayments are recoverable, however the DWP does have a discretion as to whether they recover an overpayment. There could be various reasons to ask DWP not to recover an overpayment, including that there has been no overall loss to the public purse because the claimant could have been receiving more through Pension Credit and Housing Benefit than they were getting through UC. See Standard Letter UC OP8.
What do I need to do?
Single pension age claimant
If you have a client past pension age who is still receiving Universal Credit, they need to get in touch with the DWP asap. If they leave it too long they could have a significant gap in income, they will have lost out on the extra that PC and HB would give and there will be a UC overpayment.
The DWP need to end the UC claim and then they can make new claims (and backdate request) for PC and HB.
Approaching pension age
Make claimants aware of advance claims for Pension Credit. Pension Credit advance claims can be made 4 months before the date someone becomes pension age: the easiest way to claim is to phone the Pension Credit claim line on 0800 99 1234
Anyone approaching pension age (who is not part of a mixed age couple) can make an advanced claim for Pension Credit. It is advisable to do so to reduce any delay in the Pension Credit claim being processed.
What is the DWP doing to resolve this issue?
This has been raised in different complaints and the response is that the computer system does not have a trigger to identify pension age claimants and the UC system does not automatically link to the pension system.
The DWP might place a reminder on a claimant’s journal before they reach pension age about claiming pension-age benefits, but this can not be relied upon.
Future Changes?
Housing Systems will provide further insight and information if there are any changes between linking Universal Credit and pension-age benefits.
PUBLISHED: 12th July 2024