The DWP quietly announced benefits cuts for some low-income couples – here’s why it will make a big difference The change will cut the benefits available to some low-income couples by more than £7,000 a year

On the eve of this week’s crucial Brexit vote, the Department for Work and Pensions quietly announced a change which will cut the benefits available to some low-income couples by more than £7,000 a year. But what exactly has changed, and why?

The background to the issue is that the benefits system treats pensioners and people of working age very differently. First, benefits for pensioners are generally much more generous, with the gap having increased in recent years. And second, benefits for people of working age often have very tough strings attached, usually focusing on the requirement to seek work.

A question then arises as to what to do when a couple makes a claim for benefit where one is over state pension age and the other is under pension age – so-called ‘mixed age’ couples.

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The difference could be more than £7,000

The current benefit system treats such couples relatively favourably, allowing them to claim under whichever system would be most advantageous to them – usually the system for pensioners.

But, following the DWP’s announcement, from 15 May 2019, couples making benefit claims will apply through the Universal Credit system rather than the much more generous Pension Credit system. In a full year, the difference between the two could be more than £7,000.

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The reason for the change dates back to the Welfare Reform Act of 2012 and the very strong focus in Universal Credit on the duty on people to seek paid work. Under this approach, even if one member of a couple is over pension age, the other will have to seek work and both will only be entitled to Universal Credit. This will apply to new claims and also to anyone currently on benefit who ‘flows off’ pension credit (perhaps because of a temporary increase in income) and then makes a fresh claim.

A huge cliff edge

The difference in benefit rates is huge. A working age couple on Universal Credit can get just under £500 per month or nearly £6,000 a year, whereas even a single person on Pension Credit can get around £8,700 and a couple more than £13,000. This represents a huge ‘cliff-edge’.

One way of mitigating this cliff-edge would be to pay an intermediate rate of benefit for ‘mixed-age’ couples, perhaps half-way between universal credit rates and pension credit rates, but this idea has been rejected by the Government.

‘The politics of welfare mean that working age benefits have been consistently a low priority whilst the power of the grey vote remains strong’

The way this announcement was sneaked out was totally unacceptable. Families who could be affected need to know about this major change in the rules.

It highlights the way in which working age benefits have been squeezed – and pensioner benefits boosted – for such a long time. We have now reached the stage where a single pensioner is given more money to live on than a working age couple, and it is hard to think of any objective justification for such a difference. But the politics of welfare mean that working age benefits have been consistently a low priority whilst the power of the grey vote remains strong.

Steve Webb is Director of Policy at Royal London