There has been a lot of talk in the press about the fact that the Winter Fuel Payment will be means-tested for the first time this year. So, to be entitled someone not only needs to be age 66 or over but they must have an award of certain benefits during the qualifying week of 16th – 22nd September.
Those benefits are: Pension Credit (either Guarantee or Savings), Universal Credit, IR-ESA, IS, IB-JSA and Tax Credits.
Many outlets are advising that to be entitled to Pension Credit a single pensioner needs to have an income of less than £218.15 a week and for couples less than £332.95 a week (although this can be higher if they’re disabled or a carer).
However, this could be incorrect for some pensioners, as it ignores the fact that they could be entitled to Savings Pension Credit.
Whilst Savings Pension Credit is being phased out, many pensioners can make a new claim for it. This all depends on when they were born (see below) and how much ‘retirement income’ they have.
As claims for Pension Credit can be backdated 3 months they have up until 21st December to make a claim and be entitled to a Winter Fuel Payment this year
What is Savings Pension Credit?
Savings Pension Credit was introduced in 2008. It was designed to reward those people who had made moderate provision for their retirement.
Claimants could be entitled to Savings Pension Credit in addition to Guarantee Pension Credit, or they could have an entitlement to just Savings Pension Credit.
It is often awarded to pensioners whose income may be just too high to qualify for any Guarantee Pension Credit.
I thought no-one could make a new claim for Savings Pension Credit?
Changes to the rules on who could claim Savings Pension Credit took affect from 6th April 2016, and anyone turning State Pension age on or after that date has not been able to make a new claim for it. But, protection exists for those who had already turned State Pension age by then.
So, who can make a new claim for Savings Pension Credit?
Savings Pension Credit is only available to people who reached State Pension age before it was abolished on 6th April 2016. For couples to make a new claim they must both have reached State Pension age by that date.
For women this means being born before 6th April 1953, and for men being born before 6th April 1951.
Whether they are entitled or not will depend of their income and savings.
How much income can someone have and still be entitled?
The assessment of Savings Pension Credit is quite complicated, however as a guide someone could be entitled to some Savings Pension Credit if their ‘retirement income’ is less than figures shown in the table below.
'Retirement income’ includes State Retirement Pension/s, privates/works pensions and deemed income from savings over £10,000.
Note: that if they are responsible for a dependent child/young person or have housing costs that can be covered by Pension Credit then these figures would be higher.
Weekly ‘retirement income’
|
Single
|
Couple
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No disabilities / carer
|
£260
|
£380
|
One Severe Disability Addition
|
£340
|
£460
|
One Carer Addition
|
£305
|
£425
|
Two Severe Disability Additions
|
-
|
£540
|
Two Severe Disability Additions and Two Carer Additions
|
-
|
£633
|
Click here to see who qualifies for the Severe Disability Addition
Click here to see who qualifies for the Carer Addition
And click here for our Pension Credit Primer - it will help you work out qucikly whether someone could be entitled to Pension Credit (either Guarantee or Savings Credit).
Example:
Jane is 78 years old. She is single and is reasonably fit and healthy. She has a State Pension of £200 a week, and a works pension of £50 a week. She also has £2,500 in savings. Her income is too high for her to get any Guarantee Pension Credit, but she would be entitled to £4.27 Savings Pension Credit a week. She has up until 21st December to make that claim and get it backdated so that she can also qualify for the Winter Fuel Payment.
Example:
Tahir and Salma are both 81. Salma gets a State Pension of £143.55 and Tahir gets £197.15 – a total of £340.70 a week. They don’t have any savings. They are both fit and healthy and have no caring responsibilities. They have read the news about the Winter Fuel Payment – the article says that to get Pension Credit couples who are not disabled / carers must have an income below £332.96. So they are not going to bother making a claim.
However, if they made a claim for Pension Credit they would be awarded £15.94 a week Savings Pension Credit. They have up until 21st December to make that claim and get it backdated so that she can also qualify for the Winter Fuel Payment.
As award of Savings Pension Credit would also entitle them to a free TV licence (as they are age 75 or over).
How does Savings Pension Credit work?
The claimant/s must have made provision for their retirement, this means having a total income from their State Pension, any works/private pensions and deemed income from savings over £10,000 above the Savings Credit Starting Point (which is currently £189.90 a week if single, £301.22 a week if a couple).
Savings Pension Credit does not work in the same way as other means-tested benefits because claimants need to have income above a certain threshold to be entitled to it. The amount of Savings Pension Credit someone can receive is capped (£17.01 a week for single claimants, £19.04 for couples) and entitlement is based on how much income they have so some claimants’ ‘retirement income’ will be too much to receive any.
Does someone have to have savings to qualify?
No. Although it is called Savings Pension Credit there is no requirement to have any savings – they could just have pension income and still qualify.
Impact on Housing Benefit / Council Tax Support
Where a HB / CTS claimant receives Savings Pension Credit but is not also on Guarantee Pension Credit, then any Savings Pension Credit they receive will reduce their entitlement to HB / CTS.
They will still be better off than had they not claimed the Savings Pension Credit, and would receive the Winter Fuel Payment, and if aged 75 or over could apply for a free TV licence.