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The pensions service is making a big effort to reach those who are entitled to pension credit but who haven’t claimed.

But welfare advice staff are reporting that the service is routinely miscalculating pension credit when claims are made, with the result that many pensioners are being underpaid or refused pension credit all together. This is particularly true for severely disabled pensioners and carers.

Pension credit replaced income support for pensioners in October 2003. Like its predecessor in some respects, the basic level of pension credit can be increased if people qualify for certain extra elements. These are called premiums. 

Under pension credit, there are just two additional amounts, which should be simple enough to administer. Unfortunately, these two “extras” (for carers and for people who are classed as severely disabled), are often misunderstood by pension staff.

The extra amount for severe disability for example is paid if the person:  

• Gets attendance allowance at any rate or disability living allowance for care needs at the middle or higher rate, and
• They live alone or are treated as living alone (a couple where both are disabled are treated as living alone, for example, if no-one else lives with them), and
• No one actually receives the carer’s allowance for looking after them.
• The extra amount within pension credit for carers is paid if the person:
• Gets the carer’s allowance, or
• Would be getting carers allowance if they weren’t already getting another benefit, such as a retirement pension, that is worth more. These are known as “underlying entitlement” cases.  

Advisers regularly come across cases where pension credit claims have been miscalculated, with catastrophic results.

For example, Mr and Mrs Arrowsmith are both getting attendance allowance. Their pension credit should include two “severe disability” amounts as a result (worth £88.30). There should also be two “carer” amounts included in the pension credit assessment, as they both have underlying entitlement to carer’s allowance because they care for each other (another £51.10). When the case was assessed, no carer premiums were included and they were refused pension credit. Their adviser called the pension service to query the assessment, and was told that there was no such thing as the carer amount.

Mr and Mrs Rashid were both already getting attendance allowance when the local pension service visited to do the claim for pension credit and two carer allowance claims. Their pension credit claim was then wrongly assessed, so they lost almost £90 a week. When this was queried, the adviser was told that it was not possible to have a double “severe disability” element when there was underlying entitlement to carer’s allowance. The official was adamant that pension service guidance stated this. It doesn’t of course, and eventually the benefit was corrected and arrears were paid.

But what if the Rashids and the Arrowsmiths had not been represented?

The sums involved are so large, and the errors so numerous, that only a full-scale trawl of cases by competent staff, will put confidence back in the assessment process.

Gary Vaux is head of money advice, Hertfordshire Council. He is unable to answer queries by post or telephone. If you have a question to be answered  please write to him c/o Community Care