Changes to Benefits

The capital limit for pension credit has increased from £6,000 to £10,000. The old rules disregarded savings up to £6,000 and assumed an income of £1 per £500 thereafter. This change will mean savings up to £10,000 will be disregarded for the purposes of calculating Pension Credit and will apply to all new and existing cases from November 2009. For existing cases the change to the capital threshold will apply automatically, as systems are updated to recalculate customers’ entitlements.

The Income Support Computer System (ISCS) will be enhanced to automatically re-assess all ‘Live in Payment’ Pension Credit cases and apply the revised capital threshold from 2 November. ISCS will also issue a one-off change of circumstances notification to the customer whose case has been automatically re-assessed. For any cases that cannot be automatically re-assessed, ISCS will produce a new one-off Capital Limits Conversion Report, to be printed and actioned at the Pension Centre.

As a result of the capital threshold changes, it is anticipated that a small number of Savings Credit only cases will have their current award reduced or terminated.  In these cases Her Majesty’s Treasury (HMT) and the Department of Work and Pensions have agreed that  these customers  should receive a lump sum one-off payment equal to the maximum possible loss until up rating in 2010 of £40 (£1.60 x 25 weeks). Pension Credit will be responsible for processing these cases and where applicable consider making the one-off payments along with an appropriate notification to the customer. There is no right of appeal against this one-off payment, although a decision can be reviewed if the customer requests it.
 
Pension Credit will also be identifying all new applications that were disallowed because the capital threshold of £6000 exceeded between 01 June 2009 and 1 November 2009 and advising the customer either by telephone or by letter that they may wish to consider making a fresh application from 2 November, as they may qualify at that stage once the capital threshold has increased.

The capital threshold will also be raised from £6,000 to £10,000 for Housing Benefit and Rates Relief for customers aged 60 and over. In addition to capital amount changes, Child Benefit will now be fully disregarded for housing benefit for most working age claimants (it was already disregarded for most older claimants).

Because of these changes, some existing claimants may see their benefit increase, and some clients who are not currently entitled to benefit may become entitled to it.