Pensioners with younger partners are now missing out on nearly £10,000 a year because of a benefits rule change, according to analysis by i . The Government (and the
Labour Party if it comes to power) are being urged to reform pension credits again to support older people who are struggling financially. The charity Age
UK said some older people were facing “real hardship” during the cost-of-living crisis because they cannot access the benefit aimed at boosting the income of the most vulnerable pensioners . A 2019 rule change by the Department for Work and Pensions (DWP) has stopped an estimated 60,000 mixed-age couples – where one person is of state pension age and the other is not – from accessing pension credit. The charity demanded a rethink of the policy, arguing that it is “clearly wrong” to penalise a pensioner in poverty simply for having a spouse who is younger than them. i ’s analysis, corroborated by Age UK and independent pension experts, shows that mixed-age couples are now missing out on around £9,900 per year in benefits payments. Since the 2019 changes, a mixed-age couple struggling financially must claim universal credit, which is worth hundreds of pounds less each month than pension credit. Pension credit can top up a couple’s weekly income to a maximum of £332.95 if both people are of state pension age. By comparison, couples are only eligible for a maximum £617.60 a month – around £150 a week – by claiming universal credit. The gap, at these current rates, means mixed-age couples are up to £9,902 worse off a year than they would have been under the previous arrangements when they could claim pension credit. “The mixed-age couples rule was introduced nearly five years ago, and it continues to cause real hardship for those affected,” said Caroline Abrahams, Age UK’s director. “It is clearly wrong that a couple, where one is a pensioner and the other under state pension age, can overall, be considerably better off financially if they divorce or separate.” Ms Abrahams urged all political parties to commit to changing the pension credit rules as they prepare their manifestos for the general
election , which is expected in the autumn. “It is high time that the policy is looked at again, and we hope this will be on the agenda of the next government.” Campaigners also pointed out that some younger partners of pensioners are unable to work due to their own health problems, or because they have full-time caring duties for their spouse. Former Conservative pensions minister Baroness Ros Altmann urged both main parties to consider widening access to pension credit to include mixed-age couples. “As the state pension age keeps rising, I do think keeping access to means-tested support for people who need pension credit in their sixties would be much fairer.” Baroness Altmann added: “Restricting pension credit for older people in a country where half the population does not stay healthy beyond their early or mid-sixties, will disadvantage all those on lower incomes and without private pensions or savings.” Wendy Chamberlain, the Liberal Democrats’ work and pensions spokesperson, also said it was time to review access to pension credit. “Clearly these measures which make pensioners even more financially vulnerable ought to be reviewed. Pensioners are more at risk of slipping into and staying in poverty because of their reliance on pension payments often out of their control.” Chris Stephens, an SNP frontbencher, said both main parties should commit to reversing the 2019 change in their manifesto. “We need to see changes to this system that empower older people and that can help lift them out of poverty.” Mixed-aged couples in receipt of pension credit before the 2019 changes have been able to continue receiving it – so long as their circumstances do not change. Helen Morrissey, head of retirement analysis at financial services company Hargreaves Lansdown, said couples “need to be careful” that a change in circumstances does not invalidate their claim for pension credit. “The gulf between the two benefits [pension credit and universal credit] is enormous and the shift between the two can put people’s budgets under intense strain.” Senior Labour MPs have previously criticised the 2019 rule change. Last year Labour’s Matt Rodda, who was then shadow minister for pensions, urged the Government to change the “harsh and unnecessary policy”. However, the Labour Party declined to comment on new calls to extend pension credit to mixed-age couples when asked by i about its approach to the benefit. The Government has estimated in 2019 that 60,000 previously eligible couples would no longer be able access pension credit by 2023/24 as a result of the rule changes. Ministers argued the changes would provide better “work incentives” for younger partners of pensioners . The DWP said: “Pension Credit provides long-term support for pensioner households who are no longer economically active because of their age. “This policy ensures that if someone is of working age in a couple, the law applies to them in the same way it does for other working age people – regardless of their partner being older, giving them the same incentives to work and save for retirement.”