£7k pension trap for old with jobs

THOUSANDS of pensioners could lose up to £7,000 a year from their incomes if their partners is still working.

Concerns have been raised that new benefits rules introduced last month on the same day as the Brexit meaningful vote, will hit up to 115,000 lowincome couples.

According to Labour, a mixed age couple where one is retired will now be forced to claim Universal Credit rather than pension credit, when one of them comes to claim their state pension.

They will also not be for pension age housing which is more generous.

According to Labour’s calculations, the change means a cut of just under £400million in support for pensioners on low incomes over the next three years.

It has led to claims that the Government has broken the commitment eligible benefit in the Conservative manifesto for the 2017 election that apart from winter fuel payments they would maintain all other pensioner benefits this Parliament.

The difference in the basic rates for pension credit and universal credit for a couple is £588.24 per month – or just over £7,000 a year.

Pensions credit is means-tested and also allows people to claim other forms of support such as full housing benefit.

Margaret Greenwood, Labour’s shadow work and pensions secretary, said: “Older people deserve better than this announcement sneaked out on the eve of an important Brexit vote. “Pensioner poverty is already on the rise and people who are retired on low incomes should not face losing their entitlement to pension credit simply because they have a younger partner.

“This major cut will mean that in future mixed-age couples will be forced to claim the Government’s flawed universal credit instead, leaving them potentially thousands of pounds worse off.”

In the statement announcing the changes, Pensions Minister Guy Opperman said Parliament had voted in 2012 to “modernise the welfare system” and give affected couples support “through the working age benefit regime”.

“This replaces the previous system whereby the household could access either pension credit and pension age housing benefit, or working-age benefits,” he said.

“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.

“This change will ensure the same work incentives apply to the younger partner as apply to other people of the same age.”