Two important state benefits many older people are missing out on

Mouthy Money blogger Nick Daws looks at two important state benefits that those of pension age can claim, and why some don’t.

As we all know, there’s a cost of living crisis at the moment. Many older people are especially vulnerable to rising prices, as they must survive on a fixed, limited income that almost certainly isn’t keeping up with inflation.

So today I want to spotlight two important welfare benefits for retired people that huge numbers are currently missing out on despite being eligible. They are pension credit and attendance allowance. I’ll cover each in turn.

Important state benefits: pension credit

Around one million retirees who would be entitled to this benefit aren’t claiming it, according to the government’s own figures. They are therefore missing out on an important boost to their pension.

Pension credit comes in two parts: guarantee credit and savings credit. Guarantee credit boosts your weekly income to £182.60 if you’re single or £278.70 if you’re a couple (all figures correct as from 6th April 2022). You should be eligible for guarantee credit if you have reached state pension age and your total income is less than these amounts (even if you own your own home). 

If you have under £10,000 in savings and investments this will not be taken into consideration. If you have over £10,000, it will be assumed that you earn £1 a week per £500 of savings and investments. This will be added to your total income when working out your eligibility for guarantee credit.

Savings credit is meant as a reward for those who have saved for their retirement. It’s worth up to £14.48 a week for a single person or £16.20 for couples.

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To qualify, you must have a minimum income of £158.47 a week if you’re single, and £251.70 a week for a couple. Savings credit is only available to people who reached the state pension age before 6 April 2016. 

It’s worth adding that if you pay mortgage interest or have other housing costs, have caring responsibilities, are responsible for a child, or are severely disabled, you may be entitled to more pension credit. If you receive attendance allowance (see below) or carers credit, for example, this may boost the amount you’re entitled to.

The rules surrounding all this are complicated, but the government has provided a free online calculator you can use to work out whether you qualify and how much you might get. This is for guidance only, however. You can’t apply via the calculator and there is no guarantee you will receive the amount it shows you.

To actually apply you will need to phone the DWP’s pension credit helpline on 0800 991234. You will need your National Insurance number, information about your income, savings and investments and your bank account details. The person you speak to will then take you through the application process. 

As well as the money – which can amount to thousands of pounds a year – if you receive pension credit you will be entitled to a range of additional benefits. These include:

• reduced council tax (or free if you are awarded guarantee credit)
• free TV licence if you are over 75 
• free NHS dental treatment
• help towards the cost of glasses
• help with the cost of travel to hospital
• cold weather payments
• automatic entitlement to the Warm Home Discount
• help with rent
• free home insulation and boiler grants
• extra money if you’re a carer

Even if you only receive a small amount of pension credit, you will be eligible for all of the above. So it really is well worth applying if there is any chance you may qualify. 

Important state benefits: Attendance Allowance

Attendance allowance is a UK welfare benefit available to people who have reached state pension age who need help caring for themselves due to illness or disability.  Again, it’s thought that over a million older people who would be eligible for attendance allowance are not currently receiving it.

Attendance allowance is paid at two different rates according to how much help and care you need.

The lower rate (£61.85 a week) is paid to people who need frequent care throughout the day OR night

The higher rate (£92.40 a week) is paid if you need frequent care throughout the day AND night, or if you are terminally ill.

Payments are normally made every four weeks direct to your bank account. The money is yours to spend as you wish to make your life a bit easier.

It’s worth noting that you do NOT need to have someone currently caring for you in order to claim. Eligibility is based on your need for care rather than whether you are actually receiving it.

Another important point is that attendance allowance is not means-tested – eligibility is based purely on your care needs. Also, it’s not taxable and will not normally affect your entitlement to other welfare benefits. Indeed, you may also be eligible for extra pension credit, housing benefit or council tax reduction if you receive attendance allowance.

Attendance allowance is administered by the Department for Work and Pensions (DWP). In Northern Ireland the Department for Communities (DfC) has responsibility for it.

The bad news is that there is a long (31 pages) and complicated application form. You can either download this from the Government website or you can phone them on 0800 731 0122 and ask for a form to be sent to you.

In Northern Ireland you can download the form from this site or phone the Disability and Carers Service on 0800 587 0912. You can apply yourself or someone else can apply on your behalf (with your permission, of course). 

Here are a few quick tips to make completing the form easier.

1. Don’t rush at it like the proverbial bull in a china shop. If you do, you will almost certainly make mistakes and forget things. If you requested the form by phone you have six weeks to complete and return it without any financial penalty, so take advantage of this. This is a good reason for requesting the form by phone rather than online, incidentally.

2. Read the notes that come with the form before you start to complete it. This will help you understand what the assessors are looking for to determine whether you are eligible for the benefit (and at what rate).

3. Keep a diary for a few days at least (ideally a week). Record in this all the occasions on which you need help and support. For example, if you need help getting dressed or washing, note down when this happens and how many times a day.

4. Bear in mind that you don’t have to require continuous support to receive the benefit. In addition, it doesn’t matter who is providing your care currently (or if nobody is). 

5. Remember that care needs can be psychological as well as physical. If you need support to combat loneliness and depression (or worse), you can and should mention this on the form.

Once you have completed the form, you will need to submit it by post (email is not allowed). Do not expect a quick response. It is likely to be six to eight weeks before you hear anything, though you can if you wish phone to check they have received it.

If your application is successful your benefit will be backdated to the date the form was received or, if you originally requested it by phone and are within the six-week deadline, the date the form was sent to you. If unsuccessful, you can appeal.

I hope this article will help anyone who has elderly relatives who may be struggling financially at this time, or indeed elderly people themselves.

This money is set aside for you by the government, so please don’t let pride get in the way of claiming it. If you need help completing the forms, your local citizens advice service should be able to assist.

Nick Daws writes for Pounds and Sense, a UK personal finance blog aimed especially (though not exclusively) at over-fifties

Photo by Andrea Piacquadio from Pexels