Children's Handbook Scotland | 2024/25Chapter 1: Benefits and tax credits 18. Pension credit
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18. Pension credit
Pension credit (PC) is a benefit paid to people who have reached pension age (see here) whose income is below a certain level. You do not have to have paid any national insurance contributions to get PC.
PC consists of two different elements:
    •guarantee credit, designed to bring your income up to a minimum level; and
    •savings credit, which is paid to some people who have been able to make provision for retirement over and above the basic state retirement pension.
You can qualify for either or both credits. Savings credit is being phased out.1Sch 12 para 89 PA 2014
The Pension Service (part of the DWP) is responsible for the administration of PC.
 
1     Sch 12 para 89 PA 2014 »
Who can get pension credit
You qualify for PC if:1ss1-4 SPCA 2002; Part 2 SPC Regs
    •you have reached pension age (see here). If you have a partner, your partner must also have reached pension age (there are some exceptions to this rule: see CPAG’s Welfare Benefits Handbook); and
    •you are in Great Britain (with some exceptions for periods of temporary absence) and you satisfy the ‘habitual residence test’, including having the ‘right to reside’, and are not a ‘person subject to immigration control’. These terms are explained in CPAG’s Welfare Benefits Handbook; and
    •your income is below a set level.
If you are a member of a couple, one of you must claim PC for both. Your joint income is taken into account.
 
1     ss1-4 SPCA 2002; Part 2 SPC Regs »
Pension age
The qualifying age for PC is the minimum age that you can receive your state retirement pension. Pension age has been going up and when you reach state pension age depends on your date of birth. For claimants reaching pension age at the moment, it is 66, but this will eventually go up to 68. To check your pension age, see gov.uk/state-pension-age.
Amount of benefit
PC is means tested and the amount you get depends on your income and whether you have any disabilities, caring responsibilities and eligible housing costs. PC claimants who are responsible for a child or qualifying young person may get an additional amount (instead of getting child tax credit (CTC)).
Guarantee credit
There are three steps for calculating your entitlement to guarantee credit.1s2(2) SPCA 2002
 
1     s2(2) SPCA 2002 »
Step 1: calculate your appropriate minimum guarantee
This is the minimum weekly income the government decides you need to live on. It is made up of fixed amounts depending on your personal circumstances:1s2(3) SPCA 2002; Schs 1 and 2 SPC Regs
    •the standard minimum guarantee of £218.15 if you are single, or £332.95 if you have a partner;
    •a severe disability addition of £81.50 if you satisfy the conditions that apply for the income support (IS) severe disability premium (see here);
    •a carer addition of £45.60 if you satisfy the conditions that apply for the IS carer premium (see here);
    •eligible housing costs if you are a homeowner – ie, certain service charges. The rules about who can get help with housing costs and how much you get are explained in CPAG’s Welfare Benefits Handbook;
    •an additional amount for dependent child(ren). This may apply if you are responsible for a child or qualifying young person and you are not getting CTC for them. The amount for the eldest or only child if they were born before 6 April 2017 is £76.79. The amount for any other children is £66.29. An additional £112.21 is added if the child is severely sight impaired or blind or is entitled to the highest rate of the care component of child disability payment (CDP) or the enhanced daily living component of adult disability payment (ADP) or personal independence payment (PIP). Alternatively, an additional £35.93 is added if the child gets any other rate of CDP, ADP or PIP.2Sch IIA paras 9 and 10 SPC Regs
 
1     s2(3) SPCA 2002; Schs 1 and 2 SPC Regs »
2     Sch IIA paras 9 and 10 SPC Regs »
Step 2: work out your weekly income
This is the amount you have from any pension and other sources each week. Not all your income counts. For details, see CPAG’s Welfare Benefits Handbook.
See the relevant chapters of this Handbook for how specific income (eg, fostering allowances and payments from the local authority) is treated.
Step 3: deduct income from appropriate minimum guarantee
The resulting amount is your guarantee credit. If your income is more than your appropriate minimum guarantee, you are not entitled to guarantee credit.
Savings credit
The maximum weekly savings credit you can get is £17.01 if you are single and £19.04 if you have a partner. For details of how it is calculated, see CPAG’s Welfare Benefits and Tax Credits Handbook.