Mental Health and Benefits Handbook 1st editionPart 2: Benefits Chapter 6: Pension credit
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Chapter 6: Pension credit
Key facts
    •Pension credit (PC) is a means-tested benefit for people who are at least pension age, including people with health conditions and disabilities.
    •There are two types of PC: guarantee credit, which ensures you have a minimum level of income, and savings credit, which is intended to ‘reward’ you for financially preparing for your retirement. Savings credit is being phased out.
    •You do not need to have paid national insurance contributions to get PC.
    •You can get PC while in or out of work and it can ‘top up’ state and other pensions.
    •You can get PC alongside some other benefits, including housing benefit and disability benefits (eg, attendance allowance, personal independence payment or adult disability payment). Getting PC alongside a disability benefit can increase the amount of PC you get.
    •You can challenge decisions about your eligibility for PC.
    •Getting PC can mean that you are eligible for other kinds of financial support.
1. Who can get pension credit
Pension credit (PC) is a means-tested benefit for people on a low income who are at least pension age. To check your pension age, see gov.uk/state-pension-age. Unlike state pension (see here), you do not have to have paid national insurance contributions to qualify for PC.
You can qualify for PC whether you are in or out of work, and whether or not you have a health condition or disability. There is no requirement to look for work in order to get PC.
There are two types of PC:
    •guarantee credit, which ensures you have a minimum level of income; and
    •savings credit, which is intended to ‘reward’ you for making provision for your retirement, such as through savings or an occupational pension. Savings credit is being phased out.
You can be entitled to either guarantee credit, savings credit or both.
Who can get guarantee credit
You qualify for guarantee credit if:1s2 SPCA 2002
    •you are at least pension age, which is currently 66. (If you have a partner and make a new claim for PC, both of you must usually be pension age but there are exceptions for some ‘mixed-age couples’, see here);2s126 and Sch 4 PA 1995; ss1(6) and 4(1A) SPCA 2002; to check your pension age, see gov.uk/state-pension-age.and
    •you are not a ‘person subject to immigration control’, although there are exceptions to this rule;3s4(2) SPCA 2002and
    •you are in Great Britain (except for periods of temporary absence) and satisfy the ‘habitual residence’ and ‘right to reside’ tests;4s1(2)(a) SPCA 2002; regs 2 and 3 SPC Regsand
    •your partner (if you have one) is not entitled to PC;5s4(1) SPCA 2002and
    •your income is below a certain amount (known as the ‘appropriate minimum guarantee’, see here).
Note: special rules can apply when you are in hospital or prison and in certain other situations. See Chapter 16.
 
1     s2 SPCA 2002 »
2     s126 and Sch 4 PA 1995; ss1(6) and 4(1A) SPCA 2002; to check your pension age, see gov.uk/state-pension-age. »
3     s4(2) SPCA 2002 »
4     s1(2)(a) SPCA 2002; regs 2 and 3 SPC Regs »
5     s4(1) SPCA 2002 »
Who can get savings credit
You can only qualify for savings credit if:1s3 SPCA 2002 as amended by PA 2014; reg 7A SPC Regs
    •you and your partner (if you have one) reached pension age before 6 April 2016; or
    •either you or your partner reached pension age before 6 April 2016, you were entitled to savings credit on 6 April 2016 and you have remained entitled to it.
There are further conditions to qualify for savings credit. See CPAG’s Welfare Benefits and Tax Credits Handbook for details.
 
1     s3 SPCA 2002 as amended by PA 2014; reg 7A SPC Regs  »
Couples
If you are single, you claim PC for yourself. If you are a member of a couple and both you and your partner are pension age, either of you can claim PC for you both. This is not a joint claim, only one of you claims and is awarded the benefit. If you get guarantee credit, the award includes a couple allowance and premiums for both of you, and takes into account your combined income and capital (see here). If you get savings credit, this is calculated using couple rates and based on your combined income.
If you are a member of a couple and you are at least pension age but your partner is not (often called a ‘mixed-age couple’), you cannot usually qualify for PC.1s4(1A) SPCA 2002 There are some exceptions to this rule.2Arts 4 and 7 WRA(No.31)O; Vol 13, para 77035 DMG; HB Circular A9/2019 (10 July 2019) If you do not fall within one of the exceptions, you and your partner may be able to claim universal credit (UC) instead of PC. There is more information about mixed-age couples in CPAG’s Welfare Benefits and Tax Credits Handbook.
What advisers say: couples
‘What counts as living as a couple is not always clear-cut, especially where one person is the carer for another. We sometimes see ex-spouses return to care for their ex-partner, or friends move in together, or we see long-standing couples remain together solely because of one person’s disability but have no relationship other than carer/cared-for. There is also a question about at what point an existing couple may need to have separate claims if one enters a care home (see here). If in doubt, get independent advice.’
 
1     s4(1A) SPCA 2002 »
2     Arts 4 and 7 WRA(No.31)O; Vol 13, para 77035 DMG; HB Circular A9/2019 (10 July 2019) »
2. The amount of benefit
You can be entitled to either guarantee credit, savings credit or both types of pension credit (PC).
The amount of guarantee credit
Step one: calculate your appropriate minimum guarantee
Your maximum amount of guarantee credit is known as the ‘appropriate minimum guarantee’ and is made up of a ‘standard minimum guarantee’ and any relevant ‘additional amounts’.1s2(3) SPCA 2002; regs 5 and 6, Sch 3 para 1(5) and Sch IIA SPC Regs The amounts below are weekly.
Standard minimum guarantee
£pw
Single person
£201.05
Couple
£306.85
Each additional spouse in a polygamous marriage
£105.80
Your appropriate minimum guarantee may be reduced in certain circumstances – eg, if you are in a couple and one of you is sectioned under the Mental Health Act 1983 (see here).
Additional amounts
£pw
Severe disability
£76.40/£152.80 (if both partners qualify). The qualifying rules are broadly the same as for the severe disability premium (see here).
Carer
£42.75 (for each partner who qualifies)
You can get amounts for a child or qualifying young person for whom you are responsible included in your PC if you are not already getting tax credits.
£pw
First child born before 6 April 2017
£72.31
Each subsequent child
£61.88
Addition for child with disability
£33.67
Addition for child with severe disability
£104.86
A transitional amount may also be included if you were getting income support (IS), income-based jobseeker’s allowance (JSA) or income-related employment and support allowance (ESA) immediately before you first became entitled to PC, in order to ensure you are not worse off as a result of moving to PC.2Reg 6(6)(b) and Sch 1 para 6 SPC Regs
 
1     s2(3) SPCA 2002; regs 5 and 6, Sch 3 para 1(5) and Sch IIA SPC Regs »
2     Reg 6(6)(b) and Sch 1 para 6 SPC Regs »
Step two: calculate your income
This is the amount you have coming in each week – eg, from benefits, state pensions, private pensions and earnings.1s15 SPCA 2002; regs 14-24 SPC Regs Some income is disregarded in part or in full. Benefits disregarded in full include personal independence payment (PIP), adult disability payment (ADP) and attendance allowance (AA). If you have more than £10,000 capital, you are treated as having income of £1 for every £500 (or part thereof) over £10,000.2Reg 15(6) SPC Regs For more information about how different kinds of income are treated for PC, see CPAG’s Welfare Benefits and Tax Credits Handbook.
Note: your partner’s income and savings are taken into account, but the income and savings of other people who live with you, such as adult children, are not.
 
1     s15 SPCA 2002; regs 14-24 SPC Regs »
2     Reg 15(6) SPC Regs »
Step three: deduct income from appropriate minimum guarantee
The amount of your guarantee credit is your appropriate minimum guarantee (Step one) minus any relevant income you have (Step two).1s2(2) SPCA 2002 If your income is above the appropriate minimum guarantee, you do not qualify for any guarantee credit. You may still qualify for savings credit.
 
1     s2(2) SPCA 2002 »
Step four: calculate your pension credit payment
Consider the effects of deductions1Reg 35 and Schs 9 and 9B SS(C&P) Regs and ‘alternative payment arrangements’ (see here). These may further reduce the amount of PC you receive.
Examples
Galina is single and aged 70. She gets AA. She lives alone and no one gets carer’s allowance (CA) for looking after her. She lives in rented accommodation.
Step one: Her appropriate minimum guarantee is:
Standard minimum guarantee (single person rate) £201.05; plus
Severe disability additional amount £76.40
Total £277.45
Step two: Her relevant weekly income is her basic state pension of £156.20. AA is ignored as income.
Step three: Galina’s relevant weekly income of £156.20 is deducted from her appropriate minimum guarantee of £277.45, leaving her entitled to £121.25 guarantee credit. She is also entitled to maximum pension-age housing benefit (HB) and any other passported benefits that may apply (see here).
Andrew and Peter are a couple. Andrew is 75 and Peter is 77. Louise, their 44-year-old niece, lives with them and gets CA and universal credit. Andrew gets the enhanced rate of the daily living component of PIP and Peter gets AA. They live in a home they own outright and they have pension income and savings.
Step one: Andrew and Peter’s appropriate minimum guarantee is £306.85. Their appropriate minimum guarantee does not include a severe disability addition because Louise lives with them. It does not include any carer additions because neither Andrew nor Peter is providing care for the other for 35 hours a week.
Step two: Andrew and Peter’s joint weekly income for calculating PC is £347.80, made up of basic state pension of £249.80 (Andrew £93.60, Peter £156.20), occupational pension of £95, and £3 deemed income from £11,500 savings. PIP and AA are ignored as income.
Step three: They are not entitled to any guarantee credit because their relevant income exceeds their appropriate minimum guarantee of £306.85.
 
1     Reg 35 and Schs 9 and 9B SS(C&P) Regs »
The amount of savings credit
Savings credit is paid at a maximum weekly rate of £15.94 for a single person or £17.84 for a couple (in 2023/24).1s3(7) SPCA 2002; reg 7(1)(a) SPC Regs For how to calculate the amount of savings credit, see CPAG’s Welfare Benefits and Tax Credits Handbook.
 
1     s3(7) SPCA 2002; reg 7(1)(a) SPC Regs »
3. Making a claim
Pension credit (PC) is administered and paid by the Pension Service, which is part of the DWP.
A claim for PC can be made in one of three ways.1Reg 4D SS(C&P) Regs
    •If you have already claimed your state pension, you can claim online at gov.uk/pension-credit/how-to-claim.
    •You can claim by telephone. Call the Pension Service on 0800 99 1234 (textphone: 0800 169 0133; Relay UK and BSL video services are available) from 8am to 6pm, Monday to Friday.
    •You can claim in writing on the approved form (Form PC1). You ask for the form by telephoning the number above, or you can print a copy from gov.uk/pension-credit/how-to-claim, or you can get it from a local authority housing benefit office. Keep a copy of your completed form, and if you are sending your form by post, ask the Post Office for free proof of posting.
What advisers say: Pension Service staff
‘I have always found staff on the Pension Service telephone line to be especially helpful. They also have direct access to information about someone’s state pension, which has been useful where the person does not have that information themselves.’
The date of claim is usually the date you start a claim by telephone or submit an online claim. If you claim on a PC1 form:2Reg 4F SS(C&P) Regs
    •if you requested a form from the Pension Service or from a local authority office, the date of claim is the date of your request, provided you return the completed form within one month (the Pension Service can can extend the one month deadline if it considers that this is reasonable, so if you return the form late, explain why); or
    •otherwise (eg, if you return a form too late or if you printed your blank form from the internet) the date of claim is the date your completed form is received.
If information is missing from your application, you must usually provide it within one month of being told this, or the claim will not be accepted as valid.
 
1     Reg 4D SS(C&P) Regs »
2     Reg 4F SS(C&P) Regs »
Claiming in advance and backdating
You can claim PC in advance, up to four months before the date on which you will qualify for it.1Regs 4E and 13D SS(C&P) Regs
You can ask that your claim for PC is backdated by up to three months if you met the qualifying conditions during that time. You do not need to have special reasons for backdating.2Reg 6(16) and (18) and 19(2) and (3) SS(C&P) Regs If you might have qualified for PC more than three months ago but did not claim because you were given the wrong information or misled by the Pension Service or another part of the DWP, you could complain and ask for compensation see here).
Note: the term ‘backdating’ is often informally used to mean getting arrears of your benefit going back to a claim or decision date – eg, after winning an appeal. However, in this Handbook, we use backdating to mean getting paid benefit for a period before the date you claimed.
 
1     Regs 4E and 13D SS(C&P) Regs »
2     Reg 6(16) and (18) and 19(2) and (3) SS(C&P) Regs »
Additional support and appointees
If you have (or will have) difficulty with the claims process and need additional support, see Chapter 18. If you cannot manage the claims process at all you may need an appointee (see here).
4. How you are assessed
Your eligibility for pension credit (PC) is assessed using evidence about your income, capital, and other circumstances. It is important that you provide any information required when you claim.
There is no health assessment for PC.
5. Decisions
Once your claim has been decided, you are sent a letter detailing the amount of any award, and the information on which it was based. You are asked to check this and report any omissions or changes. If you disagree with a pension credit decision, you can usually apply for a revision or supersession, or appeal against it. There are usually time limits for all of these options. See Chapter 17 for more information on getting a benefit decision changed.
6. Getting paid
When you are paid
If you reached the qualifying age for pension credit (PC) on or after 6 April 2010, PC can be paid weekly, fortnightly or four-weekly in arrears. If you reached the qualifying age before 6 April 2010, you are usually paid weekly in advance.1Regs 26B and 26BA SS(C&P) Regs; reg 36(6) SPC(CTMP) Regs
If you are waiting for a decision on your claim or you are waiting to be paid and you are in financial need, you may be able to get an advance loan of your PC.2Regs 5 and 6 SS(PAB) Regs This is called a ‘short-term advance’.
If you are moving from universal credit to PC, see the rules on here about overlapping payments.
Note: it is possible for payment of PC to be suspended (see here).
 
1     Regs 26B and 26BA SS(C&P) Regs; reg 36(6) SPC(CTMP) Regs »
2     Regs 5 and 6 SS(PAB) Regs »
Where your payment goes
PC is usually paid directly into your bank account. The DWP can alternatively pay all or part of your PC to someone else, if this is in your interests.1Reg 34(1) SS(C&P) Regs These ‘alternative payment arrangements’ might be useful if, for example, you want a trusted family member to look after your PC income because your mental health problem makes it difficult for you to manage money.
If you do not have a bank account, you can ask for your PC to be paid into somebody else’s account as above, or you can ask to be considered for DWP’s payment exception service.2See gov.uk/payment-exception-service
 
1     Reg 34(1) SS(C&P) Regs »
2     See gov.uk/payment-exception-service »
7. Reviews and reassessments
Change of circumstances
You should report all changes in your circumstances to the Pension Service as soon as possible. Do not assume that the Pension Service already knows something – eg, about changes to the other DWP benefits you claim, or about an occupational pension. You can report a change by telephone but it may be better to do this in writing so that there is a clear record of what you have said and when.
In certain cases, if you were already getting pension credit (PC) before 6 April 2016, you might not need to report all changes in your income during a specified period (an ‘assessed income period’). See CPAG’s Welfare Benefits and Tax Credits Handbook for more information.
When you notify the DWP of a change of circumstances, it can change the decision on your PC entitlement, usually by ‘supersession’ (see here).
If your change of circumstances is that you have become a member of a ‘mixed-age’ couple you may need to move to universal credit (see here).
If your change of circumstances is that you, your partner or your dependent child now receive personal independence payment, adult disability payment, disability living allowance, child disability payment or attendance allowance (ie, a ‘qualifying benefit’), you might be eligible for additional amounts in your PC. For more information about the date that these additional amounts start from, see here.
Ongoing evidence requirement
Once you are getting PC, you may be asked to provide information at any time, and if you fail to do so, PC could be suspended or even terminated.1Reg 32(1) SS(C&P) Regs; reg 17 SS(DA) Regs
 
1     Reg 32(1) SS(C&P) Regs; reg 17 SS(DA) Regs  »
8. Pension credit and other benefits
Means-tested benefits and tax credits
If you get the guarantee credit of pension credit (PC), you have ‘passported’ entitlement to:
    •maximum pension-age housing benefit (HB) (see here); and
    •maximum child tax credit; and
    •maximum working tax credit; and
    •Scottish child payment.
Note: passported entitlement does not mean you will get these benefits or tax credits without making a claim for them, and some of them are no longer open to new applications.
If you are moving from universal credit to PC, see here.
Non-means-tested benefits
Many non-means tested benefits are taken into account as income when working out the amount of PC you get. However, others are disregarded. Personal independence payment, adult disability payment, disability living allowance, child disability payment and attendance allowance are not taken into account as income and can in fact increase the guarantee credit of PC by making you eligible for additions (see here).
The benefit cap
In some cases, there is a limit on your total income from specified benefits (the ‘benefit cap’). PC is not one of the specified benefits. The benefit cap does not apply if you are over pension age and single (or if you have a partner and you are both over pension age).
Other sources of financial help
If you have a low income you may be eligible for free prescriptions, council tax reduction, and a range of other financial help. See CPAG’s Welfare Benefits and Tax Credits Handbook. Note: if you qualify for the guarantee credit of PC, you are automatically eligible for some health benefits such as free NHS dental treatment.