Pension credit comes into effect from 6 October. One complication is that pensioners who receive income support for dependent young people, will receive that support through child tax credit (CTC) from October.
There are thousands of pensioners who have dependents such as grandchildren. Also, only one member of a couple needs to be 60 or over to apply for pension credit.
Pensioners on income support should have received a letter by now explaining the transfer to the new credit in October and how much they will receive. Unfortunately, the letters sent to pensioners with children have caused much confusion. This is because the letter shows them receiving less in pension credit than they received in income support, as the amounts for children have been removed. The letter contains no reference as to how CTC will be paid to them from October.
On querying this with the local pension service, some pensioners have been told that the CTC will be paid automatically; others have been told that they have to fill in a CTC form. Belatedly, the service has amended the letter and made it clear that no one will lose out because of the switch. It seems that pensioners will, after all, be transferred automatically without the need to fill in a CTC form.
However, CTC is only paid through a bank or post office card account, so pensioners will need to have opened a relevant account by October in order to actually receive the payment due them for their children.
Many pensioners on income support who live in care homes have been told that they will lose £65.50 a week from October, because of the ending of the residential allowance. The change will make no overall difference to them, if they are supported by their local authority, because their contribution to the care home fees will reduce by the same amount, but again this is not explained in the letter. It may also mean that some self-funding residents will have to approach social services for financial help.
There are also reports of pensioners who are carers being told that they are not going to be entitled to the new credit because the claim-line had wrongly failed to add the extra amount for carers into the calculation. In one reported case, the claim-line operator stopped completing the application. If this had not been challenged, the pensioner would have lost over £20 a week.
In my own local authority area, the move to regional pension centres adds to the complications. All pensions service letters are now sent on headed paper, giving an address of a regional office in distant Norwich. However, the Norwich office is not yet operational so all the post is sent back to local offices in Hertfordshire.
Many of the people affected by these problems will be known to social work and other welfare agencies, so there will be pressure on those organisations to help people understand the pension credit system. The Department for Work and Pensions has a massive task in converting millions of income support claims to the new credit as well as handling claims from newly entitled people. And it seems that there is still a long way to go before we can be confident that the transfer will go smoothly.
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.