2. Welfare Rights Training 2009

3. Pension Credit Guarantees all over 60’s a minimum weekly income Guarantees all over 60’s a minimum weekly income

4. PENSION CREDIT PENSION CREDIT This is a brief guide to Pension Credit Type: Non-contributory. Income related & means tested. Non-contributory. Income related & means tested. Taxable: No Taxable: No

5. Pension Credit (PC) has two parts: Guarantee Credit - is for people aged 60 and over and is calculated in a similar way to Income Support. An amount known as an 'appropriate minimum guarantee' is calculated. If your income is below this minimum guarantee, the Guarantee Credit makes up the difference. PENSION CREDIT PENSION CREDIT

6. Savings Credit –gives you extra money if you have saved for retirement. It will only be paid if you or your partner are over 65. It is intended to 'reward' you for having income from earnings, savings or pensions over the level of the basic State Pension. PENSION CREDIT

7. You can get both of these parts if you satisfy the rules. If you get Guarantee Credit you can be passported to other benefits in a similar way to Income Support (IS). In some cases Savings Credit alone will be sufficient to do this. PENSION CREDIT

8. Who can claim Pension Credit? To claim PC you must be aged over 60 (or 65 for Savings Credit). If you have a partner, they can be younger than you. You must be present in Great Britain, habitually resident and not be subject to immigration control, in the same way as for IS. PC can be paid for the first 13 weeks of a temporary absence from Britain. Unlike IS, PC claimants can work more than 16 hours a week. PENSION CREDIT PENSION CREDIT

9. Guarantee Credit Guarantee Credit is calculated by comparing your weekly appropriate minimum guarantee amount with your income. Your minimum guarantee always includes a 'standard minimum guarantee'. Guarantee Credit is calculated by comparing your weekly appropriate minimum guarantee amount with your income. Your minimum guarantee always includes a 'standard minimum guarantee'. This is set at two rates: This is set at two rates: £130.00 for single claimants £130.00 for single claimants £198.45 for couples. £198.45 for couples. These figures are the same as the IS personal allowance and pensioner premium combined. These figures are the same as the IS personal allowance and pensioner premium combined.

10. Additional amounts are added and paid: Severe disability (£52.85 for each qualifying claimant or partner) Carers (£29.50 each) You qualify for these in the same way as for the Severe Disability and Carer premiums in IS. If you have children you will need to claim Child Tax Credit (CTC). Guarantee Credit

11. The appropriate minimum guarantee will also include any eligible housing costs (Mortgage Interest), calculated in the same way as for IS. Guarantee Credit

12. Savings Credit You can get Savings Credit of up to £20.40 a week if you are single or £27.03 if you are part of a couple. You can get Savings Credit of up to £20.40 a week if you are single or £27.03 if you are part of a couple. You are likely to be entitled to some Savings Credit if as a single person your income is less than around £181 a week and if as a couple your income is less than around £266 You are likely to be entitled to some Savings Credit if as a single person your income is less than around £181 a week and if as a couple your income is less than around £266 However some disabled people, carers and homeowners with housing costs will be entitled to Savings Credit if their incomes are much higher than these minimum levels. However some disabled people, carers and homeowners with housing costs will be entitled to Savings Credit if their incomes are much higher than these minimum levels.

13. All assessments are based on the amount of qualifying income weekly that you have over a threshold figure which is: £96 for single claimants £153.40 for couples If your qualifying income is below these thresholds you cannot get Savings Credit. If your qualifying income is below these thresholds you cannot get Savings Credit. Savings Credit

14. Sample calculations - single people If you are single and your qualifying income is more than £96 a week but less than £130.00 you will normally receive 60% or 60p Savings Credit for every £1 of your income you have over the £96.00. Savings Credit

15. Example 1 Mr Brown has a state pension of £96.00 a week and an occupational pension of £25 a week making £121.00 weekly. Mr Brown has a state pension of £96.00 a week and an occupational pension of £25 a week making £121.00 weekly. He will receive £9.00 Guarantee Credit to bring his weekly income of £121.00 up to the single person's rate of £130.00. He will receive £9.00 Guarantee Credit to bring his weekly income of £121.00 up to the single person's rate of £130.00. He will also get £15.00 Savings Credit (60% or 60p for every £1 of his qualifying income over £96.00 which is £25 x 60% = £15) making his total weekly income £130 + £25 = £155.00. He will also get £15.00 Savings Credit (60% or 60p for every £1 of his qualifying income over £96.00 which is £25 x 60% = £15) making his total weekly income £130 + £25 = £155.00.

16. If your weekly income was exactly £130.00 you will normally receive the maximum weekly Savings Credit of £20.40. If you are single and your weekly income was more than £130.00, the maximum Savings Credit of £20.40 is reduced by 40% or 40p for every £1 of weekly income you have over £130.00. Normally if your income is £181 or above you will not be entitled to Savings Credit.

17. Mrs Gray has a weekly income of £150.00 from her state and private pension. This is £20 more than £130.00 so her maximum weekly Savings Credit of £20.40 is reduced by £8 (40% or 40p for every £1 of the £20 excess). She will now get Savings Credit of £12.40 weekly (£20.40 - £8). Example 2

18. Sample calculations - couples If you are part of a couple and your joint qualifying income is more than £153.40 a week but less than £198.45 you will normally receive 60% or 60p Savings Credit for every £1 of income you have over £153.40. If you are part of a couple and your joint qualifying income is more than £153.40 a week but less than £198.45 you will normally receive 60% or 60p Savings Credit for every £1 of income you have over £153.40.

19. Example 3 Mr and Mrs Black have state pensions of £153.40 and an occupational pension of £35 making a total of £188.40 a week. They will receive £10.05 Guarantee Credit to bring their pension incomes up to £198.45. They will also receive £21 Savings Credit (60% or 60p for every £1 of the £35 qualifying income over £153.40 making their total weekly income £219.45 (£198.45 + £21).

20. If you are part of a couple and your joint qualifying income is exactly £198.45 weekly you will normally receive the maximum Savings Credit for a couple of £27.03 weekly. If you are part of a couple and your joint income is more than £198.45 weekly the maximum Savings Credit of £27.03 is reduced by 40% or 40p for every £1 that your income is over £198.45. Normally if your income is £266 or above you will not be entitled to Savings Credit.

21. Example 4 Mr and Mrs White have State Pensions of £153.40, an occupational pension of £30 and £25,000 savings (assumed to produce an income of £38) making a total of £221.40 a week. Mr and Mrs White have State Pensions of £153.40, an occupational pension of £30 and £25,000 savings (assumed to produce an income of £38) making a total of £221.40 a week. This is £22.95 more than the Guarantee Credit level of £198.45 weekly This is £22.95 more than the Guarantee Credit level of £198.45 weekly So the maximum Savings Credit of £27.03 is reduced by £9.18 (40% or 40p for every £1 of the £22.95 excess). They will receive Savings Credit weekly of £17.85 (£27.03 - £9.18). So the maximum Savings Credit of £27.03 is reduced by £9.18 (40% or 40p for every £1 of the £22.95 excess). They will receive Savings Credit weekly of £17.85 (£27.03 - £9.18).

22. Remember: If you are disabled, a carer or a homeowner with certain housing costs you may still get some Savings Credit even if your income is a lot more than £181 as a single person or £266 as a couple.

23. The difference between qualifying income and income Almost all your weekly income is used to work out your entitlement to Guarantee Credit. Almost all your weekly income is used to work out your entitlement to Guarantee Credit. Only certain weekly qualifying income is used when working out your entitlement to Savings Credit. Only certain weekly qualifying income is used when working out your entitlement to Savings Credit.

24. Income counted in full for Guarantee Credit purposes State pensions; Occupational and private pensions; Annuities; Retirement annuity contracts; War disablement and war widow/ers (but see below for partial and complete disregards); 0ther types of pensions including civil list pensions and those paid to victims of Nazi persecution; includes:

25. Income counted in full for Guarantee Credit purposes Most social security benefits (except those listed below); Earnings (but see below for disregards); Working tax credit; Payments from boarders, lodgers or sub- tenants (but see below for disregards); Regular payments from trust funds in most circumstances – but see below; Payments from a spouse or former spouse; ‘Deemed / tariff income‘ from capital over £6,000.

26. Disregarded income includes: Attendance Allowance and Disability Living Allowance; Attendance Allowance and Disability Living Allowance; Housing benefit and council tax benefit; Housing benefit and council tax benefit; Christmas bonus; Christmas bonus; Social fund payments including the Winter Fuel Payment; Social fund payments including the Winter Fuel Payment; Child benefit and Child Special Allowance; Child benefit and Child Special Allowance; Increases for dependent children paid with certain other benefits; Increases for dependent children paid with certain other benefits; Charitable and voluntary payments (except for voluntary payments from a spouse or former spouse, which are counted in full); Charitable and voluntary payments (except for voluntary payments from a spouse or former spouse, which are counted in full);

27. Payments, other than social security benefits or war pensions, paid as a result of a personal injury that you or your partner receive; Payments, other than social security benefits or war pensions, paid as a result of a personal injury that you or your partner receive; Income from certain types of equity release schemes that do not provide an income through an annuity; Income from certain types of equity release schemes that do not provide an income through an annuity; Actual income from capital; Actual income from capital; The War Widow's/Widower's Supplementary Pension and some additions paid with war disablement pensions; The War Widow's/Widower's Supplementary Pension and some additions paid with war disablement pensions; Payments from your local authority social services department for personal care; Payments from your local authority social services department for personal care; Any other types of income that are not specified in the legislation as being counted. Disregarded income includes:

28. Partially disregarded income includes: £5 of your earnings from work if you are single or £10 if you are a couple. A higher £20 disregard applies in some situations - for example for some disabled people or carers. The rules are similar to those for income support but there are minor differences; £5 of your earnings from work if you are single or £10 if you are a couple. A higher £20 disregard applies in some situations - for example for some disabled people or carers. The rules are similar to those for income support but there are minor differences; £10 of the total of any income from a war widow's/widower's pension, war disablement pension; pension paid for victims of Nazi persecution or widowed parents/mother's allowance; £10 of the total of any income from a war widow's/widower's pension, war disablement pension; pension paid for victims of Nazi persecution or widowed parents/mother's allowance; £20 payment from a tenant, sub-tenant or boarder and, in the case of a boarder half of any payment above £20 is also ignored. The disregard applies to each tenant and/or boarder making payments; £20 payment from a tenant, sub-tenant or boarder and, in the case of a boarder half of any payment above £20 is also ignored. The disregard applies to each tenant and/or boarder making payments;

29. If you have used the equity in your home to buy an annuity, any part of the income that is being used to pay the interest on the loan is ignored. Income from trust funds will be ignored if the trust fund was set up from a lump sum received for a personal injury. In other situations trust fund income is generally taken into account but there are some exceptions for discretionary payments. Qualifying income for Savings Credit is more or less the same as the income used to calculate Guarantee Credit but does not include Incapacity Benefit, Contribution Based ESA, Severe Disablement Allowance, Working Tax Credit, Contribution Based Jobseeker's Allowance, Maternity Allowance and any maintenance payments (it also does not include any top up of Guarantee Credit). Partially disregarded income includes:

30. Capital / Savings If you have capital of more than £6,000 (£10,000 if If you have capital of more than £6,000 (£10,000 if you are in a care home) this will affect your Pension Credit. You will be counted as having an extra £1 a week income for every £500 (or part of £500) over £6,000. There is no upper capital limit for Pension Credit. you are in a care home) this will affect your Pension Credit. You will be counted as having an extra £1 a week income for every £500 (or part of £500) over £6,000. There is no upper capital limit for Pension Credit. Capital includes cash, bank and building society savings, National Savings accounts and certificates; stocks and shares, premium bonds, income bonds and property (other than your home). It is usually valued at its current market or surrender value less 10% if there would be costs involved in selling and less any debt secured on the property. If you own capital jointly with other people you will normally all be assessed as having an equal share. Some capital is disregarded. Capital includes cash, bank and building society savings, National Savings accounts and certificates; stocks and shares, premium bonds, income bonds and property (other than your home). It is usually valued at its current market or surrender value less 10% if there would be costs involved in selling and less any debt secured on the property. If you own capital jointly with other people you will normally all be assessed as having an equal share. Some capital is disregarded.

31. Example 1 Mr Legato has savings of £7,500, £1,500 above £6000. He is not in a care home. He is considered to have "deemed income" of £3 (£1 for each £500 above £6000). Mr Legato has savings of £7,500, £1,500 above £6000. He is not in a care home. He is considered to have "deemed income" of £3 (£1 for each £500 above £6000). Example 2 Ms Adage has savings of £7,501, £1,501 above £6000. She is not in a care home. She is considered to have "deemed income" of £4 because any savings that include parts of £500 are rounded up to the nearest £500. So £1,501 is considered to be just the same as if she had £2000 savings when calculating deemed income.

32. How to claim You can claim in the following ways: call Free phone 0800 99 1234 (text 0800 169 0133); call Free phone 0800 99 1234 (text 0800 169 0133); complete and send in the tear-off coupon in leaflet “PC 1L Pick it up its yours” available from post offices; complete and send in the tear-off coupon in leaflet “PC 1L Pick it up its yours” available from post offices; print out or fill in the claim form on-line; print out or fill in the claim form on-line; at an advice centre. at an advice centre.

33. Backdating and advance claims Pension Credit can be fully backdated for up to 3 months if you have met the qualifying conditions throughout the whole period. If you are going to become eligible for PC in the future - for instance because your 60th or 65th birthday is coming up or you are about to have a drop in income - you can make a claim up to 4 months in advance of this change. If you are going to become eligible for PC in the future - for instance because your 60th or 65th birthday is coming up or you are about to have a drop in income - you can make a claim up to 4 months in advance of this change.

34. The assessed income period and change of circumstances The assessed income period and change of circumstances If you are over the age of 65 you may be given an award that lasts for up to 5 years (From April 2009 indefinitely if over 75). This is known as the Assessed Income Period (AIP). During this period annual adjustments will be made automatically for increases in your state and private pensions but you do not need to report changes such as increases in your savings or pension income. If your income goes down you will be able to ask for your benefit to be reassessed. You also need to report certain changes such as if you move home, marry, are widowed, your earnings change or you go into hospital. If you are over the age of 65 you may be given an award that lasts for up to 5 years (From April 2009 indefinitely if over 75). This is known as the Assessed Income Period (AIP). During this period annual adjustments will be made automatically for increases in your state and private pensions but you do not need to report changes such as increases in your savings or pension income. If your income goes down you will be able to ask for your benefit to be reassessed. You also need to report certain changes such as if you move home, marry, are widowed, your earnings change or you go into hospital. Remember this paragraph please! Remember this paragraph please!

35. In hospital You can continue to receive Pension Credit if you are in hospital but you will lose any severe disability addition you get after 28 days, when you’re Attendance Allowance or Disability Living Allowance stops. You may also lose any carers addition that you have. You can continue to receive Pension Credit if you are in hospital but you will lose any severe disability addition you get after 28 days, when you’re Attendance Allowance or Disability Living Allowance stops. You may also lose any carers addition that you have. How is PC paid? PC is normally paid weekly in advance unless the weekly amount of PC you are paid is less than £1, in which case payments will be made at intervals of anything up to 13 weeks in arrears. If the weekly amount is less than 10p no PC will be paid unless it can be paid with another benefit. PC is normally paid weekly in advance unless the weekly amount of PC you are paid is less than £1, in which case payments will be made at intervals of anything up to 13 weeks in arrears. If the weekly amount is less than 10p no PC will be paid unless it can be paid with another benefit.

36. If you disagree with a PC decision If you disagree with the decision you have one calendar month from the date of the decision to ask the decision maker to reconsider the decision. You can do this by telephoning or in writing. If, after the decision maker has reconsidered your case, you are still not satisfied you can appeal in writing, using form GL24. You will have one calendar month from the date of the reconsidered decision.

37. Interaction with Housing and Council Tax Benefit The Government has introduced changes to the Housing Benefit and Council Tax Benefit rules from October 2003 to mirror the rules on the treatment of income and capital in Pension Credit. The Government has introduced changes to the Housing Benefit and Council Tax Benefit rules from October 2003 to mirror the rules on the treatment of income and capital in Pension Credit. If you are entitled to the Guarantee Credit or Guarantee and Savings Credit you will normally be entitled to full Housing Benefit and Council Tax Benefit. If you are entitled to the Guarantee Credit or Guarantee and Savings Credit you will normally be entitled to full Housing Benefit and Council Tax Benefit. If you only get the Savings Credit, you will need to make a Housing benefit claim. If you only get the Savings Credit, you will need to make a Housing benefit claim. Although Housing and Council Tax Benefit will take any Savings Credit paid in to account as income in your HB & CT calculations, you will be given the full Single (£20.40) or Couple (£27.03) allowance as an extra disregard in the HB or CT calculation, so should never be any worse off financially. Although Housing and Council Tax Benefit will take any Savings Credit paid in to account as income in your HB & CT calculations, you will be given the full Single (£20.40) or Couple (£27.03) allowance as an extra disregard in the HB or CT calculation, so should never be any worse off financially. The Pension Service will collect and pass on information to local authorities and in Savings Credit only cases, the local authority will be required to use The Pension Service’s assessment of your income and capital for HB & CT claims. The Pension Service will collect and pass on information to local authorities and in Savings Credit only cases, the local authority will be required to use The Pension Service’s assessment of your income and capital for HB & CT claims. This should greatly reduce the amount of information that you have to provide to the local authority with any future benefit claim. This should greatly reduce the amount of information that you have to provide to the local authority with any future benefit claim.

38. MAIN CHANGES IN PENSION CREDIT? No additions for any children, Tax Credits have to be claimed. No additions for any children, Tax Credits have to be claimed. For Guarantee Credit there is no upper capital / savings limit if Guarantee Credit is paid. For Guarantee Credit there is no upper capital / savings limit if Guarantee Credit is paid. Capital / savings limits still apply for Housing & Council Tax benefit if Guarantee Credit is not paid. Capital / savings limits still apply for Housing & Council Tax benefit if Guarantee Credit is not paid. Capital over £6,000 now gives a tariff income of £1 per £500 over the £6,000. Capital over £6,000 now gives a tariff income of £1 per £500 over the £6,000. Working over 16 or 24 hours will not stop a claim. Working over 16 or 24 hours will not stop a claim.

39. Over 65’s get an extra amount, equivalent to the maximum savings credit, for singles (£20.40) or couples (£27.03) weekly included within any Housing & Council Tax calculation. This applies even if they do not claim any Pension Credit. New Non-Dependent deductions or any decreases in Housing & Council Tax Benefit do not apply until 26 weeks have passed. Once Pension Credit is claimed this should automatically give full Housing & Council Tax benefit, with no need to re-claim ever in theory. No Non-Dependent deduction applies if the Non-Dependent has Pension Credit Guarantee or Savings Credit. Savings Credit is to reward people with modest incomes who have saved or worked hard for their retirement. MAIN CHANGES IN PENSION CREDIT?

40. Savings Credit Summary: They compare your income/s with the normal Retirement Pension for your circumstances (single £96.00 or couple’s £153.40). If you have qualifying income under this amount you get no Savings Credit, if you have qualifying income over this amount and under the Guarantee Credit for your circumstances (Single £130.00 Minimum or Couple’s £198.45 Minimum) you get rewarded with a 60% or 60p per £1 top up on the difference up to maximum set limits. They compare your income/s with the normal Retirement Pension for your circumstances (single £96.00 or couple’s £153.40). If you have qualifying income under this amount you get no Savings Credit, if you have qualifying income over this amount and under the Guarantee Credit for your circumstances (Single £130.00 Minimum or Couple’s £198.45 Minimum) you get rewarded with a 60% or 60p per £1 top up on the difference up to maximum set limits. If you have over your Guarantee Credit amount they reduce your maximum Savings Credit top up by 40% or 40p for every £1 of the excess until you lose it all. If you have over your Guarantee Credit amount they reduce your maximum Savings Credit top up by 40% or 40p for every £1 of the excess until you lose it all.

41. END Questions and Answers?