Children's handbook Scotland
Chapter 1: Benefits and tax credits
13. Pension credit
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13. Pension credit

Pension credit (PC) is a benefit paid to people who have reached the 'qualifying age' (see Cross reference) 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. The savings credit is being phased out.Footnote

The Pension Service (part of the Department for Work and Pensions) is responsible for the administration of PC.


Who can claim pension credit

You qualify for PC if:Footnote you have reached the 'qualifying age' (see below) or, in the case of savings credit, you or your partner are aged 65 or over; 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 and Tax Credits 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.


Qualifying age
The 'qualifying age' for PC is the minimum age that a woman can receive state retirement pension. For PC claimants (women and men) born before 6 April 1950, this is 60. For claimants born on or after 6 April 1950, this is increasing until it reaches 66 by 2020 and will eventually go up to 68. For more information, see CPAG's Welfare Benefits and Tax Credits Handbook.
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. From 1 February 2019, PC claimants who become 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.Footnote


Step one: 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:Footnote the standard minimum guarantee of £163.00 if you are single, or £248.80 if you have a partner; a severe disability addition of £64.30 if you satisfy the conditions that apply for the income support (IS) severe disability premium (see Cross reference); a carer addition of £36.00 if you satisfy the conditions that apply for the IS carer premium (see Cross reference); eligible housing costs if you are a homeowner – ie, certain service charges. The rules about who can get help with housing costs, when help starts and how much you get are explained in CPAG's Welfare Benefits and Tax Credits Handbook; an additional amount for dependent child(ren). This may apply after 1 February 2019 if you are responsible for child or qualifying young person and you are not getting CTC for her/him. The amount for the eldest or only child if s/he was born before 6 April 2017 is £63.84. The amount for any other children is £53.34. An additional £88.34 is added if the child is severely sight impaired or blind or is entitled to the highest rate of the care component of DLA or the enhanced daily living component of PIP. Alternatively, an additional £29.02 is added if the child gets any other rate of DLA or PIP.Footnote


Step two: 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 and Tax Credits Handbook.

See the relevant chapters of this Handbook for how specific income (eg, fostering allowances and payments from the local authority) is treated.


Step three: 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 £13.40 if you are single, and £14.99 if you have a partner. For details of how it is calculated, see CPAG’s Welfare Benefits and Tax Credits Handbook.


14. Personal independence payment

Personal independence payment (PIP) is a benefit for people with mobility problems and/or care needs as a result of a disability. It replaces disability living allowance (DLA) for claimants aged 16 to 64. If you are aged 16 or over and are already on DLA, you will be invited to claim PIP, unless you were already aged 65 or over on 8 April 2013.

PIP has two components:

a daily living component, paid at either the standard rate or the enhanced rate;

a mobility component, paid at either the standard or the enhanced rate.

You can get either the daily living component or the mobility component, or both. PIP is not means tested and you do not have to have paid any national insurance contributions to get it.

The Department for Work and Pensions is responsible for the administration of PIP.


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