A look at the extra support in general for people affected by cancer and Pension Credit in particular,. Retirement Pensions are important but stay the same in sickness and in health . But there is very useful extra help available that may be very relevant to people affected by cancer from disability benefits (regardless of your income and savings) and Pension Credit, which can apply a lot further up the income sacale than you might think. …
In previous blogs around benefits for those over pension age I focused on the important and changing benefit that is the State Retirement Pension.
Now, while I hope you found these useful in terms of any wonderings about how your current Retirement Pension is worked out or what lies ahead if you are coming up to Retirement Pension under the new post April 2016 scheme, this biggest of all benefits does not often lead to problems and is not affected by you starting on a cancer journey.
But there are other additional benefits that you can have on top of Retirement Pension. Some - like the disability and carers benefits - which are very much affected by health issues but not at all by your income and savings and others, like Pension Credit that can be affected by both.
So, this time I’m going to take a quick overview of these additional benefits - see links to further detail on these benefits that apply to all ages - and then start to focus on Pension Credit, with a bit more detail on how it works and applies in common cancer scenarios next time. .
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1. Extra help when affected by cancer
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1.1 Disability benefits
One of the most important extra benefits , if you start to experience long term difficulties with daily living activities after pension age is Attendance Allowance (AA). These difficulties might be as the result of cancer and its treatments and “late effects” or whether due to other health issues that can come along in older age, or a combination.
Others may be over pension age now, but started to experience extra difficulties with daily living and/or getting around before they turned came of age. They might have previously been be on AA’s companion benefit, Disability Living Allowance (DLA) or it's replacement Personal Independence Payment (PIP). Once on DLA, you stayed with it through into pension age 65th , which is why there are around 1 million people over 65 on DLA, even if no-one could start a DLA claim after they had reached pension age.
These two benefits - AA and DLA - are very closely related with very similar criteria.
This was largely an update of a blog written by my most excellent predecessor, Jude, so you may spot a different - but complementary - line in tangents and whimsy
From April 2013 , a newer benefit called Personal Independence Payment (PIP), has been replacing “working age” DLA.
As with DLA, any PIP award made before your 65th birthday can carry on through. Things get a bit more complicated, however, for people who were on the old DLA, as there is a process underway to make all those on working age DLA apply for PIP instead.
The upshot is that if you are in your later 60s then the important issue is not how old you are now, but how old you were on the 8th April 2013:
- if you were on DLA but aged under 65 on that day then you will be caught up in the need to apply for PIP instead underway until March 2021 - so some people as old as 73 could be caught up in this process near the end of it.
- if you were aged 65 or over at that date, then you will stay with your DLA through “pension age” and not be asked to claim PIP instead.
Many people are delighted to receive much needed extra money from a disability benefit, regardless of their level of income and savings. And those on lower incomes, relieved to know that that new income won’t be taken away from any other “income-related” benefits like Pension Credit.
The real surprise though is to realise that an award of AA, DLA or PIP can actually trigger extra amounts within the “income-related” benefits. Unfortunately, neither the DWP nor your local council will do this automatically, but it takes but a brief follow up form to shake up to £64.30 a week extra out of them
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1.2 Help for carers
If a person living with a cancer diagnosis gets either of the disability benefit above - that’s AA, DLA or PIP - then that opens up the potential for a carer - of any age- to claim Carer’s Allowance (CA)
You can claim at any age after 16 and are not prevented from doing so by being the partner of someone you support. But nor do you have to be a relative or living with them to claim. The basic criteria is that you are with the person you help for 35 hours or more a week, which in some situations could be clocked up in a weekend.
There are restrictions if you are in full time education or earning more than an earnings limit of £128 a week.
You don’t have to be in the peak of good health yourself either. You can be a carer and have long term health issues of your own. It is quite possible then to receive both a “disability benefit” in your own right because of your health problems and claim a Carer’s Allowance for looking after someone else.
At first sight, that seems contradictory. But do bear in mind that disability benefits are not about someone being totally unable to do things at all, but are paid in recognition of the fact that you could do with a hand with extra difficulties, such as the late effects of cancer treatments. Disability are in fact aiming to promote independence and the ability to participate in society, which could include supporting a friend, neighbour or partner.
And similarly when it comes to caring for the purposes of Carers Allowance, that isn’t about the the heavy lifting of physical care needs of say a Home Carer; it could just be about prompting and encouraging someone in a low mood.
In practise, many older couples talk of their respective difficulties along the lines of: “We’ve got one good pair of legs and one good pair of eyes between us :-)” So a couple then could both be claiming say Attendance Allowance for their own individual difficulties, (e.g. one related to cancer, another to the less dramatic - but still very limiting- effects of arthritis). And at the same time each could be claiming a Carers Allowance for helping the other out.
Sometimes the good folk at Pension Credit still struggle with the same person getting additions for both disabilities and carers and it has proved all to much for the bright young things designing Universal Credit. But in real life it makes total sense when you stop and think about it :-)
The fun bit with CA for people over pension age, is that most many will be getting a Retirement Pension worth more than Carers Allowance.
Now, unfortunately, both these benefits come into a group of “earnings replacement” benefits - the basic historic benefits to replace earnings from work. There may be several reasons why you might not be earning that might apply at the same time, but the rules say that you only need your earnings replaced the once :-( . They are also called “overlapping benefits” because as you usually only get paid the one, whichever is the highest.
So, the result of your Carer's Allowance claim could be a polite letter back saying “Yes you qualify for Carer’s Allowance, but I’m afraid we can’t actually pay you anything, but you may want to show this letter to Pension Credit” . It does though in the best traditions of the brown envelope, take them a few pages to tell you this :-).
There can though still be a point in making that CA claim even when you know you won't be able to be paid it :-) And that’s because you would still have an “underlying entitlement” to that CA even if they can’t pay you. And that is good for an extra £37.50 a week in any Pension Credit sums.
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1.3 Pension Credit
So we have State Retirement Pension which is blithely unconcerned with your state of health and is paid “in sickness and in health” and “disability benefits” which is all about extra money for extra difficulties related to long term health issues, including cancer. And related to them Carers Allowance
Pension Credit (PC) fits somewhere in between in these “How are you today?” stakes. It’s basic purpose is to top up low retirement incomes for all pensioners regardless of any health or caring issues. However, there are also extra amounts within Pension Credit for some people receiving a disability benefit or for those acting as carers.
And as a result, it may be that while you didn’t qualify for Pension Credit before, you might well qualify after the award of a disability benefit or after registering for Carer’s Allowance.
Let’s take a closer look and see how that - and Pension Credit - works
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2. What is Pension Credit?
Pension Credit (PC) came in from October 2003 to replace the previous Income Support (for people aged 60+). It’s basic aim was to abolish poverty in old age, as a bare Retirement Pension - currently £119.20 a week - is a very hard thing to live on when there is not a lot else coming in.
PC comes in two parts:
- the main PC Guarantee Credit that tops up your income to various set levels depending on your circumstances and
- a small additional PC Savings Credit that gave a reward for having saved or paid into a pension scheme.
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2.1 The idea behind PC Guarantee Credit
Well why not just simply put up the Retirement Pension significantly or at least start putting it up in real terms?
To do that - given the way the “old scheme” Retirement Pension was organised - would have been incredibly expensive and - as with all public services - require a grown up conversation about tax and spending that we don’t want to have
However, since 2010, the Government have done both. The real increases from the "triple lock guarantee on Retirement Pension have been very welcome. But the money to pay from it is coming from real cuts to the already much lower rates of “working age” benefits. So while the overall social security budget has not been cut, within it the allocations between “pension age” and “working age” benefits have shifted significantly and painfully
There has been a bold headline increase in the new State Retirement Pension to take a full new style pension, to £155.65 just over single Pension Credit levels. But that is not quite all that it seems, which it can’t be as this seemingly dramatic change is also meant to be self funding :-). For more details see here.
So back in 2003, Pension Credit’s main aim was to at least get the 2 million lowest income pensioners out of basic subsistence levels and up to a level that while still modest could provide an adequate amount beyond the absolute basics if you are in reasonable health.
And with other benefits on top and additions within that PC, there would be extra help for those facing the extra costs of long term health issues or being a carer. This then was the aim of the main PC Guarantee Credit
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2.2 The idea behind PC Savings Credit:
The difficulty was that the more generous means tested top up of the main PC Guarantee Credit might seem unfair to those who had made some modest retirement provisions of their own, which then just got clawed back as their main PC Guarantee Credit was removed £ for £ because of some small pension or life savings prudently squirrelled.
So a small PC Savings Credit gave something back for such savings and small pensions, potentially offering a small PC payment for a further 3 million older people on slightly higher incomes. However, the Government is whittling away the Savings Credit with a view to ending it altogether both to help the new single tier Retirement Pension sums add up and because long term they see a higher retirement pension as a better way of encouraging savings and pension contributions.
So I will focus on the main PC Guarantee Credit for the rest of this blog and in particular how being affected by cancer may increase your entitlement to it
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3. How old do I have to be to get Pension Credit?
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3.1 The rise in Pension credit age
When it started the age for Pension Credit for both men and women was tied to the then women’s Retirement Pension age of 60. So back then a 62 year old man might not be able to draw his own State Retirement Pension until he was 65 , but he could claim Pension Credit from the age of 60
But that women’s pension age is gradually increasing and will reach the same age as men at 65 in November 2018. It will then increase for both men and woomen to 66 by September 2020. At the time of writing the minimum age for pension credit is 65 years and 7 months .
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3.2 Mixed age couples
A mixed age couple is where one partner has reached pension age, but their partner hasn't quite come of age. On average men are some 3 years old than women, but the gap can go the other way ofr be considerably larger. At some point all couples would fo through that awkward mixed age couple.
In the past there was a choice. Either:
- the older partner could claim PC for the both of you; or
- the younger partner could claim an equivalent “working age” benefit.
Broadly speaking the money came mes to the same, with an extra pensioner premiums in "working age" benefits to make the amounts match those offered by PC. That said life can be a lot simpler with a PC claim and if you have savings, then PC treats these much more kindly.
But everything changed. From the 15th May 209, the choice was removed. Now both partners have to be of pension age to start a new claim for Pension credit (PC) . Those mixed age couple already claiming PC could stay on it, so long as they do not come off PC for any reason (e.g. a tempting offer for 3 months work or being abroad for more than the time PC allows) If you lose your PC you usually can't get it back.
So now for new couples or people who have lost their PC - there is no choice:
- The younger partner will have to lead on a joint claim, usually for Universal Credit. The previous choice is removed.
- And this time it really makes makes a difference as UC does not have a "pensioner element" to top up basic UC rates to PC levels. All couples stand to lose up to £148.80 a week
- And with extra amounts for disability from UC and changes to carers, the loss for couples who both have long term health issues could rise to some £280 a week. However, these couples should get advice before making any UC claim, as they may be able to claim "legacy benefits" instead of UC
I’ll come back to the difference that can being forced on to UC can make, but for now the key advice is get advice before becoming a mixed age couple or making any cahnges that might end your current PC award.
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4. How much is Pension Credit?
The important thing to remember is that the amounts listed in PC Guarantee Credit tables are not the amount of PC you actually get, but rather the amount to which Pension Credit will top you up. Not all your actual income counts in this sum though…
So, without the important potential additions for people affected by cancer, the basic “appropriate amount” to which PC Guarantee Credit would top you up, is £173.75 a week if you are single and £265.20 a week if you are claiming as a couple.
But before you think “Well I have a bit more than that coming in, so PC doesn’t apply to me” , don’t forget those important additions that could take those PC “appropriate amounts" up as high as £278.20 a week for a single person and up to £474.10 for a couple (all at 2020/21 rates)
You might then be in the PC ballpark after all - especially when you remember that the value of any “disability benefit” (such as AA, DLA and PIP) is totally ignored in these sums.
Only around 60 to 70% of people entitled to Pension Credit actually claim it, while those that do, don’t always get everything they are entitled to.
Research has shown that factors like dislike of forms, reluctance to disclose finances, pride and concerns that “means tested” benefits are somehow charity are important barriers. But the single biggest reason is that many people don’t realise they could claim, thinking PC only applies on the very lowest incomes.
And that’s why I and my fellow Maggie’s Benefit Advisors are always keen to double check if you are missing out on PC, not just because of the useful extra cash that Pension Credit can bring, but also because of the sometimes considerable associated benefits that come with an award of PC
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5. But I have quite a bit of savings, does that not rule me out?
No - at the moment - unlike most other similar “income-related benefits” - there is no fixed upper savings or capital limit. When it comes to assessing your capital, your own home, car, possessions etc are ignored anyway, but most other property, savings, bank accounts, money under the bed :-) does all count. Some specific items are ignored permanently or for a reasonable time anyway.
Where you do have capital after any such "disregards" then the total amount will start to affect any PC sums as follows:
- the first £10,000 has no effect whatsoever and is ignored.
- above that first £10,000 you are counted as having £1 a week of extra "tariff income" for every £500 of savings
So if you had say £30,000 as your retirement nest egg, that would mean you would be counted as having 20,000 / 500 = £40 a week more in net income than you actually have. Any actual interest received is ignored and it’s this artificial - and rather higher - tariff income that is counted
Now, for some, that may be enough to take your income in the PC sums over your PC “appropriate amount” , but for many it may just act to reduce rather than stop your Pension Credit. Some people, for example will have a fairly modest income, but perhaps have quite a lot of lifetime savings or now have new decisions to make about a pension pot. I will look at that whole fascinating world another time too
The team I was working in when PC first came in thought at first glance that this novel removal of an upper savings limit was all interesting in theory, but not likely to affect our clients. But then we realised this covered quite a few of our people who had been unable to claim the old Income Support because of small life time savings or a miners redundancy payment here or an inheritance there.
With all the additions in place, the gap - before savings were considered - between what they had coming and their PC appropriate amount could often mean a potential PC top up of £60 to £80 a week. And it would take forty to fifty thousand pounds in savings to wipe that out. So don’t count yourself out of PC without checking out sums with an Advisor.
And if you have rent or council tax to pay, then the lack of any fixed upper limit on Pension Credit can really help in another way. Both Housing Benefit and council tax support do have an upper savings limit of £16,000, so if you went to your council direct with, say £30,000 in the bank, they would, with regret, have to turn you down.
But if you are able to qualify for even a small payment of PC Guarantee Credit, then you are passported through the council’s savings and income assessments. Anyone on PC Guarantee Credit - even the lowest potential award of 10p - is automatically entitled to full help with rent and council tax
Not a lot of people know that… But now you do. So, don’t let having a bit of a pension pot or some life savings in the bank put you off checking out any potential PC.
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Coming up next time.
I will continue with Pension Credit, but this time taking you through some examples of how the sums work in some common – and not too roundabout - scenarios for people affected by cancer. The aim will be to help you think that you might just be eligible after all - especially after an award of a disability and/or carers benefit.
Updated June 2020
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Links and further reading
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Finding individual face to face help from a Benefits Advisor:
- Visit your local Maggie's Centre and talk with one of our benefits advisors. Find your nearest centre here
- See if there is a Macmillan advice service near you here
- Find your local Citizens Advice office: in England & Wales - here. In Scotland - here
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Other blogs in this series
- Part 1: Introduction - when is pension age? welfare reform in pension age, steps to maximum entitlement - available here
- Part 2: State retirement Pension - the pre-april 2016 sytem - history and what makes up your entitlement - available here
- Part 3: State retirement Pension: the new post April 2016 scheme and how your entitlement is still largely governed by the old rules - available here
- Part 5: PC sums in more detail - available here
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