Pension Credit is the equivalent of Universal Credit for people who are over pension age (which is currently 66)
Pension Credit a what-you’ve-got-vs-what-you-need benefit.
The Pensions Service (the part of the DWP that deals with older people) works out a weekly needs-level called your Appropriate-Minimum-Guarantee (ffs!)
They then look at what money you have coming in from pensions, investments, savings and work.
If your income is less than your needs-level you get a top-up of Guarantee-Credit .
If you get this top-up you are passported to maximum rate Housing Benefit to help with your rent.
If you are too rich for the Pension Credit top-up, the council’s Housing Benefit department does their own version of the calculation. You can still have Housing Benefit, but will probably get a reduced rate because of your excess-income.
The basic needs level for a single person is £227.10 per week.
Many/most people who got to pension age after April 2016 are entitled to New-State-Pension of £230.25 per week; so they are too rich for a Pension Credit top-up.
People who got to pension age before 2016 often get lower levels of State Pension, and so they do qualify for Pension Credit.
Pension Credit and Disability
If you are an older person who has an illness or disability that causes care needs you may get:
- DLA Care Component – if you claimed before pension age, before June 2013
- PIP Daily Living Component – if you claimed before pension age after June 2013
- Attendance Allowance – if you claimed after Pension Age
- A Scottish disability payment equivalent to one of the benefits in this list
If you get one of these benefit (not counting the low rate of DLA Care of £29.20 pw) this can lead to an increase in your Pension Credit needs-level
The Severe Disability Premium
If you are a single person and you:
- get one of the disability benefits listed above; and,
- no other adult lives with you; and,
- nobody gets Carer’s Allowance or UC-Carer-Element for looking after you,
then an extra £82.90 is added into your Pension Credit needs-level, taking it to £310.00 per week
In the law, this is called an Additional Amount for a Severely Disabled Person, but it’s often known as a Severe Disability Premium.
To qualify for this extra amount in your Pension Credit needs-level, you must tell the pensions service about your award of DLA, PIP or AA – the system is not joined-up.
So What?
If I’m working with an older person who gets the disability benefits listed above I always check to see whether they are missing out.
- It may be that before they got the DLA/PIP/AA, they claimed Pension Credit and were told that they are too rich. But now, with the increased needs level, they qualify.
- It may be that they are getting Pension Credit, that they claimed before they got the award of disability benefit, and because they haven’t told the Pensions Service about the disability benefit, the needs-level is wrong.
- It may be that even with the increased needs-level, they are still too rich for Pension Credit, but if we tell the Housing Benefit department, they will include the extra premium in their calculations, thereby increasing the HB
If you spot someone who has been missing the Severe Disability Premium , it’s often possible to get back-payments – sometimes significant amounts of money.
What this post has simplified:
Pension Credit has two parts – Guarantee Credit and Savings Credit. This post ignores Savings Credit, because it’s not really relevant to the main point.
The needs-level includes amounts for you (and your partner if you have one) and any children who live with you.
This post only gives figures for single people. Couples can also qualify for the SDP, but only if both partners get DLA/PIP/AA.
When they are looking at whether there are any other adults in your household, other people who also get DLA/PIP/AA are ignored
The government plans to bring PC and HB together for new claims from 2026. Sign-up for updates