Am I entitled to a pension credit if my spouse has not reached the legal retirement age?

Pending deadline: Mixed-age couples who are eligible for pension credit have one last chance to enroll before August 13 (Stock image)

Mixed-age couples who are eligible for pension credit have one last chance to enroll before midnight on August 13 to avoid the potential “financial disaster” of losing tens of thousands of pounds in benefits, according to Age UK.

A controversial rule change in mid-May means that couples where one partner is past the statutory retirement age and the other is younger can no longer claim the pension credit – or a series of ‘other related benefits – until the second also reaches the official retirement age.

Low-income couples aged one year apart stand to lose £ 7,000 in pension credit, while those with a five-year age difference will lose £ 35,000 while waiting for the younger partner to reach the pension credit. retirement age.

But pension credit and housing allowances can be backdated for three months, so Age UK is urging qualifying poorest retirees to use this final window until mid-August to make claims – find out how here below.

Married or PACS couples without pension credit may also lose access to cold weather payments, health and dental assistance, and local tax reductions.

And Age UK points out that the BBC’s new means test for those over 75 to get a free TV license, which is expected to take effect from June 2020, also depends on eligibility for pension credit.

Those over 75 in difficulty will therefore only get a free television license if they have a spouse who has already passed retirement age, while those whose partner is younger lack it.

The legal retirement age is currently 65 for both men and women, but it’s slowly increasing – find out when you reach it here.

What is the government saying about changing the mixed age rule?

“This change was passed by Parliament in 2012 and means that now only single retirees and retired couples can claim a pension credit,” said a spokesperson for the Ministry of Work and Pensions.

“If a partner is of working age, we think it’s fair that the same incentives to work and save for retirement apply to them as to other people of the same age.

“We have updated the guidelines online and written to affected mixed-age couples to inform them of the changes, which will not affect them unless their entitlement to both benefits ends and they reapply. late.”

The government also notes that the pension credit is intended to provide long-term support to low-income retired households who have permanently left the labor market.

Couples who are no longer eligible for the pension credit will instead be eligible to apply for the universal credit, which merges six benefits into one.

But Steve Webb, former Pensions Minister and now Policy Director at Royal London, warns the change may still cost some more than £ 7,000 a year, as working-age benefits are generally less generous than the credit from pension.

The change in the mixed-age rule does not affect existing pension credit applicants, only new ones.

But if a couple with an age difference temporarily loses eligibility – due to a change in income or because one of them travels abroad to see relatives for just over four weeks, for example – he will not be allowed to reapply.

Caroline Abrahams, Charity Director at Age UK, said: “It is not at all unusual for one partner to be older than the other, so many older low-income couples could be affected by this. policy change without even knowing it yet.

“Many unsuspecting retirees face a hefty financial penalty for having a younger partner, which makes life considerably more difficult for both of them, as they will be forced to exist on much less money. We fear that for some this may mean the difference between living reasonably well and truly struggling.

“This rule change by the government weakens the safety net for older people in need and increases the level of inequality between less fortunate older people and others.

“It is deeply regrettable in our opinion and for any affected couple, a complete financial disaster. We reiterate our call on the government to reverse this decision.

The charity argues that no one should be denied benefits designed to support retirees just because they have a younger partner.

He says many of those affected by the government’s change in pension credit rule have health issues or family responsibilities and are struggling to manage the income they currently have.

Apply for a pension credit before August 13

According to Age UK, all retirees living on a low income with a partner who has not reached retirement age should urgently verify their eligibility for retirement credit and housing benefits, and file a backdated application before they go. it is not too late.

The deadline is Thursday August 13 at midnight.

Anyone in need of assistance can call the association’s advice line on 0800 169 6565 or visit their website here.

This is Money has details on how to apply for a pension credit here.

Mixed-age couples who would previously have been eligible are by definition low-income and more likely to be in poorer health at a younger age than other people, according to the report.

“If they live in the poorest half of the country, they can expect to be in poor health already by the time they reach retirement age.

“In fact, men and women living in the 10 percent of the most disadvantaged areas have a healthy life expectancy of only 52 years – many years before reaching retirement age, which means that many younger partners of mixed couples may be in poor health and also have difficulty working.

Age UK says its analysis of data from the UK Household Longitudinal Study 2016-2018, which is funded by the Economic and Social Research Council and supported by a number of government departments, shows that 31% of couples have a gap in age five. or more.

People with low incomes and potentially eligible for the pension credit risk losing £ 35,000 if they are five years old.

Around nine per cent of couples have an age gap of 10 years or more, and they could miss £ 70,000 and more if the younger partner cannot work before retirement age.

This only takes into account the retirement credit, not the housing allowance or the other payments described above, nor the free TV licenses for those over 75 from next summer.

TOP SIPPS FOR DIY PENSION INVESTORS

Some links in this article may be affiliate links. If you click on it, we may earn a small commission. This helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.