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Benefits Blog

by Tombenefits

news and thoughts from the world of welfare rights
09 August 2016 at 11:58

Pension Credit sums in more detail

A look at how the magic roundabout of Pension Credit sums work in detail with the help of some examples.

Last time - see the blog here -  I looked at extra amounts for older people affected by cancer in general and the too often unclaimed Pension Credit in particular.

This time, I look at some examples of how the sums work for the main Pension Credit (Guarantee) in more detail. I hope the sums aren't too offputting, but my aim is to try to show how PC works in practise. The characters may be both fictional and familiar :-), but they face some common scenarios for people affected by cancer.

This blog may help you to check whether you are missing out on extra help within an existing Pension Credit claim or to see how you may now be entitled to PC for the first time, perhaps because of extra disability and carers additions that might now apply.

I'm picking up the numbering from last time, so if you missed that you can find it - and many other Benefit Blogs - on "catchup" here :-)

 

6. How do Pension Credit sums work in detail?

Essentially, PC compares the money you have coming in with an “applicable amount” set for your household, depending on based on whether or not you have a partner and whether or not you qualify for a couple of additions.

 

6.1 The basic “appropriate amount

These amounts include a standard amount for anyone which is £155.60 if you are single and £237.55 if you are one of a couple.

So for example:

- Dylan has a full basic Retirement Pension of £119.30 and a small works pension of £21.30 A weekly total of £140.60 He applies for PC and gets £155.60 - £140.60 = £20 a week

And because he is on Pension Credit, he automatically qualifies for full help with any rent, council tax and health costs e.g. fares to hospital. He also spends a lot of time looking after his friend Ermintrude,

- Zebedee springs into the Centre and at first sight is not entitled to PC. As well as his full pension of £119.30 he gets £75.15 a week in works pension from the Magic Roundabout Company and has £20,000 of savings, which add a nominal £20 tariff income on to his income figure used in the PC sums.

At a total of £214.45, Zebedee seems well over the basic single “appropriate amount” for Pension Credit. And he has to pay all his rent and council tax too, so he is dipping into his savings to pay the bills. But we will come back to Zebedee after we have sorted out his Attendance Allowance :-) .

- Florence, 64 and Dougal 56 are a couple. Florence has built up a good works pension of £161.85 a week and a full state Retirement Pensions at £119.30. Dougal has long term mental health difficulties and gets Contributory Employment and Support Allowance of £109.30 a week and Personal Independence Payment Daily Living Component of £55.10 a week .

Their total income for PC purposes is £390.45, with Dougal’s PIP being ignored as income. They are though well over their basic PC amount of £237.55. Florence is used to managing Dougal, sweetly, and the household finances.

Florence has come into the Centre more for emotional support and to join in other activities after a recent diagnosis of breast cancer. They face extra costs but Florence thinks they might manage prudently if she keeps Dougal's spending on a tight lead. But her Centre's Benefits Advisor grabs her from the Kitchen Table for a quick benefits check, with a glint in his eye :-)

So: Dylan qualifies for PC at the moment with just the basic amounts, but for now Zebedee, Florence and Dougal don’t. But that look in the Advisor’s beady eye is all due to the power of PC additions, that may well benefit all four of them :-)

 

7 Additions to your Appropriate amount

As well as the basic amounts for a single person or a couple, there are currently two additionsredit sums, both of which could potentially be relevant to people affected by cancer:

 

7.1 The Carers addition

The Carers Addition is worth an extra £34.60 and applies to anyone who either:

- receives the Carer's Allowance: or

- who has had one of those “it’s not you, it’s me” letters back from Carers Allowance mentioned in the last blog. These are the ones that say you do qualfy for CA, but we can't actually pay you anything because you are already receiving another "overlapping benefit" 

And with most people claiming a Retirement Pension, it’s more likely to be the latter that applies. Your Retirement Pension, then, would usually stop a Carers Allowance being paid, but you would still retain an “underlying entitlement” to that CA.

And that’s good enough for the PC carer’s addition. So that’s why your Advisor is going to suggest you apply for a benefit that s/he knows you are not going to get. It’s often best to humour them :-)

Both partners in a couple could be getting a carers addition, perhaps for looking out for each other

 

7.2 the severe disability addition

This is the big one, worth an extra £61.85 a week in the sums. This can apply to people who get a disability benefit (eg AA, DLA or PIP), but not to everyone who does so. There are some extra conditions just to complicate things :-).

To qualify for a severe disibality addition:

a - you must get the right disability benefit:  either AA or its equivalent i.e. PIP Daily Living (either rate) or DLA Care (at middle or highest rate) - DLA and PIP Mobility or DLA Lowest Care won’t count ; and

b - you must be counted as living alone - If you do then this is straightforward enough. But if you don't live alone you may still be counted as living alone, as some people who may be in your household can be ignored; and

c - no one must be actually receiving Carers Allowance for looking after you

So:

the first thing - for condition a - is to get the relevant “disability benefit” . Either you do, you don't or your Advisor may have high hopes that you might, having just helped you make a claim for PIP or AA.

For condition b, it can be very straightforward if you do. But other adults who may be in your household may be ignored - by Pension Credit not necessarily you :-) for the purposes of the addition. For example:  under 18s, people staying temporarily who normally live elsewhere, people who also have a disability and people who are there on a commercial basis (whether they pay you rent as lodgers or you pay them rent as landlords)

The third condition c can often rest on the difference between a carer actually being paid Carers Allowance and merely making a claim for it. If a carer is actually paid the Carers Allowance, then the severe disability addition stops.  The overall effect on both their incomes would be either:

- a straight swap: the person with cancer loses up to £61.85 and the carer gets the full value of their £62.10 Carers Allowance.

- or even a net loss. if the carer is on a means-tested benefit themselves (eg Income Support or Pension Credit), then they may well be paid the Carers Allowance. This is then taken away from their benefit £ for £, but they do get some of it back via a carers premium. The value to the carer in that scenario is only an extra £34.60 a week,  but the person they care for loses up to £61.85 :-( 

But there’s a third happier "win-win outcome" from making a Carers Allowance claim :-) And this might be quite common in “pension age”.

This happy result occurs when a carer claims CA, but can’t actually be paid it because it overlaps with say a Retirement Pension or a Contributory ESA. The carer can still have a PC carers addition, and so is still £34.60 up on the deal.

But because Carers Allowance is not actually paid, then it does not get in the way of the £61.85 severe disability addition for the person they are caring for :-). Cakes are both had and eaten and buns come with their pennies :-)

It does seem complicated, but I hope this just about makes sense . If in doubt get advice first before claiming Carers Allowance. Feel free to message me.

A lot of people entitled to a severe disability addition don’t actually get it added on, as there is no reliable automatic mechanism for triggering the follow up form - called a PC10 - when someone on PC is awarded a disability benefit.

Meanwhile, it seems a bit odd to get more PC after your disposable income has just increased because of an award of AA, DLA or PIP, so you might not even think to ask. All the more so for someone not yet getting PC who might not realise that they have now - by the power of additions - become entitled to PC.

Meanwhile many Pension Service staff  are not totally clear and will get mystified at the idea of someone being entitled to both carers and severe disability additions at the same time. But having read the last blog you so get ihow that could be :-)

It may seem hard to make sense of, but it would be a shame after all that hard work getting your disability benefit sorted, if you were to miss out on an extra £61.85 - and sometimes far more :-) - for the sake of a quick phone call, a short PC10 form - like the one here-  which can often come down to two ticks and a signature :-).

And if you are thinking you may have been missing out all this time, then it can be sorted. One of my colleagues  recently spotted an unpaid severe disability addition,  and a few ticks on a PC10 and a covering letter led to 5 years back pay of around £15,000 with interest :-)

 

7.3 back at our case studies

Perhaps it’s easier if we apply these additions to our three magic roundabout households.

7.3.1 Dylan

Dylan is already on PC but that doesn’t stop the Advisor’s beady income maximising eye.

- “Let’s apply for a benefit we know you aren’ going to get “ she says, enthusiastically.. “ Because of all the care and support you are giving Ermintrude"

- “Well if it makes you happy, man” said Dylan , doubtfully.

The result is that “Dear Dylan, it’s not you, it’s me ” letter from Carers Allowance. Dylan sends the letter to PC, dubiously and is delighted to get a carers addition adding £34.60 on to his Pension Credit.

 

7.3.2 Zebedee

Zebedee can’t get PC at the moment, but following a diagnosis of cancer of the spring, his Advisor applies for Attendance Allowance. He is awarded the top rate of £82.30 as the cancer has affected his bounce after some aggressive treatment and ongoing WD40 therapy. -

- “Well this is handy” say Zebedee gratefully, as it will save me drawing on me savings to pay the rent”

- “Just a minute”, says his advisor as she reaches for a Pension Credit claim form “By My Sums! You are now entitled to Pension Credit”

The extra income from Attendance Allowance doesn’t count for PC,  so for the sums Zebedee still only has £214.45 a week coming in. But as Zebedee lives alone and no one is getting Carers Allowance for helping him, he now qualifies for a severe disability addition. HIs PC amount goes up from £155.65 to £217.45, while his income has remained at £214.45. So he now qualifies for £3 a week PC

- “Well, it may only be £3, but every little helps” , says Zebedee, not too disappointedly
.
- “Ah, but now you are on PC, you are passported through the Housing Benefit savings limit and can get all your rent and council tax covered” says his Advisor, beamingly. "That £3 is actually going to be worth around £90 a week to you!"

- “Boinnngg!!!", says Zebedee.

 

7.3.3 Florence and Dougal

As things stood, Florence and Dougal could only get a carers addition added to their PC amount bringing their appropriate amount up to £272.15, which would still be a long way short of their income for PC of £390.45. Although Dougal’s PIP is at the right rate for a severe disability addition, he does not live alone because Florence is in the house.

However, with Florence facing a rough year of cancer treatment, she could also apply for PIP. And after a successful application, things change markedly in the PC sums.

Each one of them is now ignored for the purposes of the other’s severe disability addition, so not only can Dougal now get the addition he was previously denied, but Florence can also have one added to in their joint PC sum. So two lots of severe disability addition makes a claim much closer.

And because they both get another overlapping benefit, they can each claim Carers Allowance for looking after the other, without affecting each other’s severe disability addition. So two lots of carers additions can be added in as well. So with two lots of each addition.  their joint PC”appropriate amount rises to £430.45.

With neither Dougal’s previous PIP award, nor Florence’s new PIP award counting as income, PC still counts them as having £390.45 coming in . So now, Florence and Dougal  get the difference of £40 a week as a PC Guarantee Credit top up. Along with full council tax, rent, and help with fares to hospital.

 

8. Ok, OK, so how do I claim. I bet it’s complicated?

You can make a claim for Pension Credit on a paper form or by telephone. Details are here.

Claims can be backdated for up to 3 months. So if you have missed out you can go back a little way. Or if you know you are only going to qualify after claiming a disability benefit, you have time to get that decision and still backdate to the start date of that disability benefit claim. 

sometimes though the answer comes back no from disability benefits. The general rule of thumb is don't take no for an answer - at least not without talking to an Advisor first as some 60% of disability benefit appeals are successful.

However, that can take time, and so there might be a need to protect that potential Pension Credit , while the disbility benefit is sorted out. This is much simpler if you are already on PC now, as any extra in additions can simply backdated too. If you would only get PC with the additions in place, then there is a daft twist needed to protect that potential PC bit. Message me to find out more, he said enigmatically :-)

 

 

9 Summary of these last two Benefits Blogs

Changes to Retirement Pension - the biggest benefit of all - are all very interesting and blogworthy - see here - but your entitlement is not affected by any health or caring issues

Many over pension age who get a cancer diagnosis - regardless of income and savings - can apply for a “disability benefit" (such as Attendance Allowance or Personal Independence Payment) However, Age UK estimate that only 50% of people who  could be entitled to AA actually claim it and many forms are never returned.

Please then, don’t be put off by antiquated names such as Attendance Allowance nor the long forms - you can be very much walking wounded and fiercely independent and still qualify. Do find out more - e.g. from the blog here - and if in doubt message me.

An award of a disability benefit can mean extra money for a carer, but there is a potential warning if they were to actually receive that Carers Allowance. An award of CA can sometimes adversely affect the benefit of the person you look after. However, where both people are over “pension age” then Retirement Pension can knock that worry on the head. If in doubt, message me :-)

Pension Credit is there to top up the low income of anyone over 63 and 1/12th at the time of writing :-)  PC awards can stretch much further up the income scale than you might at first think. Even the basic levels are higher than people imagine, but with the additions - that may well be relevant to people affected by cancer - many more people can become entitled to PC. As a result, a single person on some £250 a week or a couple on £400 a week (in both cases ignoring any income from a disability benefit) may still be entitled.

There is no upper savings limit for Pension Credit so depending on the gap between your income and your PC “appropriate amount”, you might have some significant savings and still qualify for somePC

Even if you only end up with a very small award of PC, that can trigger full help with rent and council tax, and full access to health costs (e.g. fares to hospital and dental and optical charges). And it will get you over any savings limits within these other income-related benefits, taking you from no help with the rent to full help with the rent

Only 70% of people who are entitled to a Pension Credit claim it, so don’t be one of the too many people who miss out. If in doubt message me and we can do beautiful sums together, along with a full benefits check.

So if in doubt about any how this applies to you, please feel free to message me:-)

 

Coming soon :-)

I have left out:

  - some interesting fiddly bits around Pension Credit as it currently is (such as the PC Savings Credit and the impact of the new pension pot choices) and

  - some of the changes coming Pension Credit’s way as a knock on effect from the big changes happening to younger folk.

So no prizes as to what the next blog will be :-).

If you have any questions or comments about this blog or Pension Credit in general please join the conversation here

And to discuss your individual situation privately, please message me and we can swap private messages and/or set up a one to one Booked Benefits Session

In the meantime, I hope some just right Goldilocks days of Summer come your way :-)

Best wishes,

Tom :-)

 



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