Thousands on state pension warned to look out for letter on doormat in WEEKS – move you must make or risk losing £1,000s
THOUSANDS on the state pension are being warned to look out for a letter on doormats in weeks.
It comes as two million claimants on legacy benefits are being asked to move benefits under a process known as managed migration.
Everyone under the state pension age will be asked to claim Universal Credit.
However, starting in August, those claiming tax credits who are over the state pension age will be asked to claim pension credit instead.
Refuse to do so, and you could miss out on £1,000s worth of cash to help with essential bills and the general cost of living.
Pension credit is a tax-free benefit designed to help with living costs if you are over the state pension age (66) and on a low income.
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Eligible households will be contacted via letters in the post which tell them how to make the move from tax credits to pension credit.
It's vital that households apply for pension credit within three months of receiving their managed migration letter.
If you claim tax credits as a couple and one of you is below the state pension age, you'll be asked to claim Universal Credit instead.
Failing to do this can result in your benefits being stopped.
Since March 2024, the Department for Work and Pensions (DWP) has sent nearly 824,050 migration notices.
However, according to the DWP's latest figures, 184,120 individuals lost their benefits after failing to act on migration notices received between July 2022 and March 2024.
Some 400,940 individuals have since made successful claims for Universal Credit, and another 238,990 are still in the process of transitioning.
What is managed migration?
ADVICE from Ayla Ozmen, director of policy and campaigns, at anti-poverty charity Z2K.
The DWP is stopping so-called "legacy benefits" for over two million people.
That means you won't be able to claim benefits like income-related employment and support allowance, income support, tax credits, or housing benefit (unless you're in temporary accommodation or supported housing).
Instead, you'll need to claim Universal Credit.
The DWP is sending everyone currently getting these benefits a letter called a "migration notice", giving you three months to claim Universal Credit or pension credit (if they're over the state pension age).
If you don't claim and don't ask DWP for more time, your legacy benefits could be stopped – even if you're not getting Universal Credit either.
That means you might not have anything to live on, and you'll be at risk of building up debt on important bills like rent.
If you leave it too late to claim Universal Credit, you won't be "repaid" for the gap either.
And you could also miss out on something called the transitional element.
Some people, including many disabled people, get less money under Universal Credit than under legacy benefits.
The transitional element means that you don't face a sudden drop when you move to Universal Credit under managed migration, but instead it reduces over time.
But if you ignore your migration notice and later claim Universal Credit, it's treated as a brand new claim – so you get no transitional element
MANAGED MIGRATION PROGRESS
In January, the government announced the number of migration notices it plans to send out in the coming financial year.
Before this date, the focus was sending migration notices to households claiming tax credits-only.
However, 110,000 income support claimants and a further 120,000 claiming tax credits with housing benefit started receiving their letters in April.
Over 100,000 Housing benefit-only claimants started being contacted in June.
More than 90,000 people claiming employment and support allowance (ESA) and child tax credits will be asked to switch from July.
Meanwhile, 20,000 claimants on jobseekers allowance (JSA) will be contacted from September.
The Sun previously reported that, from August, those claiming tax credits who are over state pension age will be asked to apply for either Universal Credit or pension credit.
It was originally planned that those claiming income-related ESA alone would not be moved until 2028.
However, the DWP brought forward plans to move these households to Universal Credit by the end of 2025.
From September 2024, 800,000 households will begin to receive letters explaining how to move from ESA to Universal Credit.
WHO'S ELIGIBLE FOR PENSION CREDIT
It is available for people who are over the state pension age, and who live in England, or Wales.
This is currently rising to 66 for both men and women.
It used to be the case that couples, where one person was over state pension age, could claim, but new rules now mean that both people in a couple must be over retirement age to apply.
This means if you're single and move in with a partner who is younger than the state pension age, you will stop being eligible.
But if you're already receiving pension credit under the old system it won't stop unless your circumstances change.
To qualify, you'll need to have a weekly income of less than £201.05 for single people or £306.85 for couples.
Your income is worked out taking into account various elements including:
- Your state pension
- Any other pensions you have saved, for instance, workplace or private pension savings
- Most social security benefits, for example, carer’s allowance
- Any savings or investments worth over £10,000
- Earnings from a job
The calculation does not include:
- Attendance allowance
- Christmas bonus
- Disability living allowance
- Personal independence payment
- Housing benefit
- Council tax reduction
If your income is too high to get pension credit, you may still get some savings pension credit, so it's worth checking.
HOW MUCH WILL I GET?
There are two parts to the benefit and pensioners can be eligible for one or both parts - here are the current rates for the tax year:
- Guarantee credit - tops up your weekly income to a guaranteed minimum level. This is £218.15 a week if you're single and £332.95 a week for married couples.
- Savings credit - provides extra money if you've saved money towards retirement. You can get an extra £17.01 a week for a single person or £19.04 a week for a married couple.
You may also get additional pension credit if you are disabled, have caring responsibilities or have to pay certain housing costs such as mortgage interest payments.
For instance, you can get either £66.29 a week or £76.79 per week for each child or young person you're responsible for.
If you are disabled or care for someone who is disabled, you may get more.
For example, if you have a severe disability, you could get an extra £81.50 a week, or if you care for another adult, you could get an extra £45.60 a week.
How do I apply for pension credit?
YOU can start your application for pension credit up to four months before you reach state pension age.
Applications for pension credit can be made on the government website by visiting www.gov.uk/pension-credit/how-to-claim.
You can also apply over the phone by ringing the pension credit claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you'll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to (usually 3 months ago or the date you reached state pension age)
If you claim after you reach pension age, you can backdate your claim for up to three months.
HOW IS PENSION CREDIT PAID?
Your benefits are usually paid into an account, for instance, a bank account.
They're usually paid every four weeks.
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You’ll be asked for your bank, building society or credit union account details when you claim.
But if you have problems opening or managing an account, you might be able to claim a different way.