Pension Credit
Coverage
- Persons that have reached the qualifying age, are living in Great Britain, have a right to reside in the United Kingdom or the common travel area and whose income is below a certain level.
Financing
- Funded through general taxation.
Administration
- The state pension service administers Pension Credit and the public pension system in general. It is part of the Department for Work and Pensions.
Qualifying Conditions
- An individual claimant must have reached qualifying age. This is linked to the state pension age of women. In mixed-age couples, both claimants must have reached pension age.
- The individual must have the right to reside and currently live in Great Britain (England, Scotland and Wales).
- The individual must also be habitually resident in either the United Kingdom or the common travel area (including the Republic of Ireland, the Channel Islands and the Isle of Man).
- It is means-tested: the person’s income must be below a certain level, defined as the ‘appropriate amount’. In determining this, the ‘relevant income’ is the person’s (and their partner’s) weekly income, including claimed pensions and social security benefits. It will also include capital savings over a certain amount (although certain property, such as one’s home, is excluded).
Benefits
- The amount of benefits granted is the difference between the ‘appropriate amount’ and the ‘relevant net income’. The appropriate amount is made up of the standard amount (representing the minimum amount deemed necessary for day-to-day living) and extra amounts in some circumstances, including: severe disability, carers, certain housing costs and responsibility for children or qualifying young persons.
- The benefit must be increased each tax year in line with the increase in the general level of earnings.
- Pension credit is tax-free.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
- Persons that have reached the qualifying age, are living in Great Britain, have a right to reside in the United Kingdom or the common travel area and whose income is below a certain level.
- Funded through general taxation.
- The state pension service administers Pension Credit and the public pension system in general. It is part of the Department for Work and Pensions.
- An individual claimant must have reached qualifying age. This is linked to the state pension age of women. In mixed-age couples, both claimants must have reached pension age.
- The individual must have the right to reside and currently live in Great Britain (England, Scotland and Wales).
- The individual must also be habitually resident in either the United Kingdom or the common travel area (including the Republic of Ireland, the Channel Islands and the Isle of Man).
- It is means-tested: the person’s income must be below a certain level, defined as the ‘appropriate amount’. In determining this, the ‘relevant income’ is the person’s (and their partner’s) weekly income, including claimed pensions and social security benefits. It will also include capital savings over a certain amount (although certain property, such as one’s home, is excluded).
- The amount of benefits granted is the difference between the ‘appropriate amount’ and the ‘relevant net income’. The appropriate amount is made up of the standard amount (representing the minimum amount deemed necessary for day-to-day living) and extra amounts in some circumstances, including: severe disability, carers, certain housing costs and responsibility for children or qualifying young persons.
- The benefit must be increased each tax year in line with the increase in the general level of earnings.
- Pension credit is tax-free.
Legal Basis: Pensions Act 2014;Welfare Reform Act 2012; Pensions Act 2007; The State Pension Credit (Additional Amount for Child or Qualifying Young Person) (Amendment) Regulations 2018; The State Pension Credit Act 2002; Pensions Act 1995.