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Pension Credit Guarantee

MatildaMatilda Member Posts: 2,616 Disability Gamechanger
Has Pension Credit Guarantee been 'frozen' in some way?  It used to be the case that this payment was uprated sightly each year which was cancelled out by the annual increase in my small occupational pension, so my pension credit stayed the same.  However, for the past two or three years my pension credit has been reduced in line with the occupational pension increases.

Replies

  • [Deleted User][Deleted User] Posts: 211 Pioneering
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  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    Thanks, mumof3.  It's the reduction in the pension credit element itself that I'm querying.
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  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    edited January 2017
    OK thanks, mumof3.  A benefit advisor will know the answer.
  • Sam_AlumniSam_Alumni Scope alumni Posts: 7,731 Disability Gamechanger
    I found this information from this website, don't know if it is useful?

    "The main rates of working age benefits and tax credits will be frozen in cash terms for 4 years from April 2016. Pensioner benefits are excluded from the benefit freeze and will be protected by the ‘triple lock’."


    Scope
    Senior online community officer
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    Thanks, @Sam_Scope.  My Pension Credit Guarantee payment definitely seems to have been frozen but I don't know why.
  • Sam_AlumniSam_Alumni Scope alumni Posts: 7,731 Disability Gamechanger
    Definitely worth a phone call to check it out then! Good luck
    Scope
    Senior online community officer
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    I think that a benefits advisor might know the reason.
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    Hi Matilda

    I agree with Sam, it's worth a phone call to The Pension Service to check because the amounts for pension credit guarantee have not been frozen.The standard minimum guarantee credit will rise 2.4% in line with earnings meaning the rate for a single person will increase by £3.75 to £159.35 a week in 2017/18.

    Best wishes

    Paul
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    Thanks, Paul. I get my State Pension (£XXX) itself listed on my letter from the Pensions Service, then below that is another sum (£XX) called Pension Credit.  I believe that I receive this additional sum because I am in receipt of PIP (and previously DLA).  I don't know the full breakdown of the additional sum but I know it includes payments for my ground rent and service charge).

    I'm not too sure now if it is Pension Credit Guarantee I receive, or just Pension Credit.  I don't think that the additional sum is a top up to a low pension, but additional sum I am eligible for because I receive PIP.
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    Hi Matilda

    You asked about Pension Credit Guarantee and Paul is right in that these rates have not been frozen.

    However, there are changes being made to Pension Credit Savings which is gradually being phased out. I suspect it is this you are receiving. See this government factsheet for more information.

    David
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    Thanks, David.
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    It's hard to say Matilda but it could be a mixture of 2 things which are happening here. As David says, the savings credit is being phased out. That was part of pension credit which paid you if you had savings or other income (but not too much of either!) The savings credit threshold rises every year, making it harder for you to have enough qualifying income to get any savings credit. In addition, your savings credit is capped (although that capped amount is in fact rising in April 2017).

    However, because you say the calculation is affected by your PIP and includes some help with housing costs, I'm more inclined to think that it might be the guarantee credit (only the guarantee credit can cover any housing costs). In that case, what may have been happening in recent years it that only the standard minimum guarantee went up - that's the bit which is effectively cancelled out by a full state retirement pension. But the other bits in the calculation, which reflected disability, stayed the same - and that would have the effect of reducing your pension credit because of the occupational pension increases.

    This Age UK leaflet explains the calculation for the whole of pension credit. You could also look at last year's benefit rates and this year's side by side here. In April, we see more of a rise because there was a small amount of inflation to be reflected in those benefits which are not frozen! So you may find that this year, the reduction doesn't happen, or doesn't reflect the whole of your occupational pension increase. 

    The other factor is that if you have an assessed income period (these are no longer used, but used to be in the past and may still apply to you), the DWP don't look at actual changes in income during that period, but only 'deemed increases' - for example, periodic increases in the occupational pension which they can predict without asking you.

    I hope this makes some sense of it. I'd still recommend calling the Pension Service and perhaps Age UK to double check. 

    Will
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
  • MatildaMatilda Member Posts: 2,616 Disability Gamechanger
    Thanks, Will.  That does make sense of a very complex issue!

    I am part way through a four-year assessed income period.  DWP have deemed my annual increases in occupational pension but these are more or less the same as the actual increases.
  • BenefitsTrainingCoBenefitsTrainingCo Member Posts: 2,692 Pioneering
    It's a pleasure Matilda. Hopefully from this April you will see something slightly different happening although it may not be enough to be more than the occupational pension increases (the bit of pension credit which reflects disability is going up by a grand 1%!)

    Will
    The Benefits Training Co:
    Paul Bradley
    Michael Chambers
    Will Hadwen
    Sarah Hayle
    Maria Solomon
    David Stickland
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