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Pension Credit

Department for Work and Pensions written question – answered on 10th February 2020.

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Photo of Shabana Mahmood Shabana Mahmood Labour, Birmingham, Ladywood

To ask the Secretary of State for Work and Pensions, if she will make an assessment of the potential incentive for mixed-aged couples to live alone as a result of the changes to pension credit entitlement which came into force in May 2019.

Photo of Shabana Mahmood Shabana Mahmood Labour, Birmingham, Ladywood

To ask the Secretary of State for Work and Pensions, what additional financial support her Department provides to mixed-age couples as a result of the changes to pension credit entitlement which came into force in May 2019.

Photo of Shabana Mahmood Shabana Mahmood Labour, Birmingham, Ladywood

To ask the Secretary of State for Work and Pensions, whether she has put in place additional financial support for mixed-age pensioners as a result of the May 2019 changes to pension credit entitlement for mixed-aged couples; and if she will make a statement.

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions

Pension Credit is intended to provide long term support for people who have permanently retired from the labour market on grounds of age.

The Government does not believe it is right that different labour market conditions should apply to people below State Pension age based on the age of their partner. The younger partner in a mixed age couple should have the same incentives to work and save for their own retirement as other people of the same age. Unlike Pension Credit, which in most cases allows couples to retain only £10 a week of earned income, Universal Credit provides clear incentives for people to find and progress in work. The younger partner in a mixed age couple claiming Universal Credit will get the personalised support provided by Work Coaches to help them find and progress in work where appropriate. If the younger partner is unable to work because of disability or caring requirements, additional amounts may be payable and conditionality requirements adjusted.

No work-related requirements will be applied to the older partner and there is no effect on entitlement to, or ability to receive, a State Pension.

This change does not apply to couples already claiming Pension Credit and/or Housing Benefit for pensioners on 14 May 2019 for as long as they remain entitled to either benefit.

In means-tested benefits, couples in a household are treated and assessed as a single unit rather than on an individual basis. The rate for a couple is lower than the rates would be for two single people to take account of lower aggregate living expenses for a couple. There is no evidence from elsewhere in the tax-benefit system that this leads to couples separating. In developing the policy, it was judged that the strategic objective of maintaining contact with the labour market and incentives to save for retirement outweighed the risk of genuine separation, given this lack of evidence.

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