Government 'sneaks out' up to £7,000 pension cut for poorest elderly couples ahead of Brexit vote

Ministers accused of attempting to bury the harsh impact of the change to pension credit

Rob Merrick
Deputy Political Editor
Tuesday 15 January 2019 13:11
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Government ‘sneaks out’ £7,000 pension cut_1

The poorest pensioner couples could lose up to £7,000 a year, under a cut “sneaked out” while MPs are preparing for the showdown Brexit vote.

Ministers have been accused of attempting to bury the impact of the change to pension credit, which tops up the incomes of hard-up elderly people.

It means couples where only one partner is over the state pension age, which is now 65 or up to 68 for both men and women depending on when they were born, will no longer receive the extra benefit.

It will take effect from 15 May, when the partner below the pension age is required to make a claim for universal credit, which merges six working-age benefits into a single payment.

“This change to the benefit rules means that some couples could lose thousands of pounds depending on whether their claim falls a day before or a day after the May deadline,” warned Sir Steve Webb, a former pensions minister.

“People who may be affected deserve to know about this change and not have it sneaked out on a day when ministers were no doubt hoping that everyone’s attention was directed somewhere else.”

The Department for Work and Pensions (DWP) quietly revealed the cut in a written Commons statement at 7.20pm on Monday evening – as MPs held talks ahead of the meaningful vote on Theresa May‘s Brexit deal.

Sir Steve, now director of policy at mutual life, pensions and investment company Royal London, said the DWP had said it was “considering” how universal credit would affect pension credit as recently as last month.

He said a couple expecting to receive £13,273 in the 2019-20 financial year from pension credit would see that figure fall to just £5,986.68 under universal credit.

In the statement, Guy Opperman, the pensions minister, argued parliament had voted, in 2012 to “modernise the welfare system” to give the 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 that the same work incentives apply to the younger partner as apply to other people of the same age, and taxpayer support is directed where it is needed most.”

Mr Opperman argued he had already announced that the “this change would be implemented once universal credit was available nationally for new claims”.

He added: “Today I can confirm that this change will be introduced from 15 May 2019.”

The new lower rate of pension credit will also apply where there is a break in a claim – after a temporary increase in income, for example – before a fresh claim is made.

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