Universal Credit: 40,000 pensioners to be worse off by £5,500 after DWP Pension Credit reform Labour said the Tories had broken the election pledge of safeguarding benefits for pensioners

Labour has accused the Government of breaking an election pledge to protect benefits for pensioners after it was revealed that more than 40,000 older people are set to be worse off by on average £5,500 a year simply because their partner is younger them.

In January, i reported that mixed aged couples – where one person is of state pension age and the other is still of working age – will be exempt from claiming Pension Credit from 15 May.

Instead these couples will have to claim Universal Credit, which is worth hundreds of pounds less each month. Charities have warned that the change could push pensioners further into poverty and that they are being punished for having younger partners.

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Tens of thousands of people affected

Last month the Government was accused of attempting to “bury” the news about the implementation date by “quietly” announcing it ahead of the meaningful vote on the Brexit deal.

Following a Parliamentary question tabled by Labour, it has been revealed that around 40,000 mixed-aged couples will be affected by the change by 2021/22. Around 15,000 people will be hit in 2019/20 alone. In total there are 115,000 mixed-age couples currently claiming Pension Credit or pension-age Housing Benefit.

‘These are people on low incomes who not only may receive significantly less support under Universal Credit, but also find that their younger partner could be subject to the unfair sanctions regime’ Margaret Greenwood, Shadow Work and Pensions Secretary

Labour said the Conservative Party was breaching its 2017 election manifesto, which pledged to safeguard all pensioners’ benefits except winter fuel payments, adding that “pensioner poverty” was increasing.

“Pensioners on low incomes should not have to lose out on Pension Credit just because their partner is younger than them,” said Margaret Greenwood MP, Labour’s Shadow Work and Pensions Secretary.

“These are people on low incomes who not only may receive significantly less support under Universal Credit, but also find that their younger partner could be subject to the unfair sanctions regime,” she said.

The Pension Credit cut will amount to a loss of more than £400m over the next three years and the number of couples affected is likely to rise over time.

“Labour will ensure that older people get the support they need to enjoy security and dignity in retirement,” added Ms Greenwood.

Caroline Abrahams, Charity Director at Age UK, said the figures “demonstrate the potentially devastating impact” of the changes.

“We are extremely concerned that many mixed age older couples will be pushed into poverty as a result of the new policy or find themselves in the absurd position of being significantly better off financially if they split up or live separately from their partner.

“We urge Ministers to review this decision, which was sneaked out and impacts all too soon in May. In the meantime any pensioner who thinks they may be entitled to Pension Credit should put in a claim now rather than wait until May, when the change in policy could leave them thousands of pounds a year worse off.”

Pension Credit

Until May, mixed-age couples can continue to claim Pension Credit, which is an income-related benefit to top up the state pension, if one partner is of pension age. Together they will be entitled to roughly £250 a week and the benefit means the younger partner does not have to look for work.

From 15 May though, only couples where both partners are of pension age will be eligible to claim Pension Credit. Mixed-age couples will have to claim Universal Credit which is worth £499 a month, and the younger partner will have to look for work unless they are a carer or incapable of working.

The reform, part of bid to get more people into the labour market, was set out in the Welfare Reform Act 2012.

It will not affect any mixed-age couples already claiming Pension Credit before 15 May. Mixed-age couples will still be able to claim Pension Credit if one person is of pension age and also claiming housing benefit when the rules change.

Charity Age UK has been calling on the Government to reconsider the reform or make extra allowances for pensioners.

It has warned that some pensioners with younger partners might reconsider living together.

Last month i spoke to a mixed-age couple, the Lees, who were concerned about the Pension Credit reform. Richard Lee said he and his wife Julie, who is 10 years younger than him, were seriously considering divorcing if they faced financial hardship.

The Pension Credit change will be another financial blow for Waspi women, too.

A DWP spokesperson said: “This change was voted on by Parliament in 2012, and we have always said it would be implemented once Universal Credit rollout was completed. It restores fairness by ensuring only people of pension age can access pension age benefits.

“We are writing to all mixed aged couples currently receiving Pension Credits to inform them of the rule change, and we are working with stakeholders to communicate with people that may be affected in the future. People currently in receipt won’t be affected unless their circumstances change.”