Britons are being urged to check if they’re eligible for a tax-free income boost through Pension Credit, worth up to £3,500 a year.
Pension Credit is one of the DWP’s most underclaimed benefits but it can open the door to additional financial help, such as entitlement to Council Tax support.
Council Tax Reduction is a benefit aimed to help people who are on a low income or claiming certain benefits to pay their Council Tax bill.
There is no specific amount someone may be entitled to, the rate depends on the person’s circumstances and where they live.
However, those who receive the Guarantee Credit component of Pension Credit might be able to get their council tax bill paid in full.
What is Pension Credit?
Pension credit is a benefit distributed by the Department of Work and Pensions (DWP) to help those retired and on lower incomes with living costs. The benefit is separate from the state pension and people can receive this even if they have other income, savings, or own their own home.
To claim, a person must live in England, Scotland or Wales and have reached the state pension age (currently 66 and over). They or their partner must also be receiving housing benefits. If this applies, the person must then work out their total weekly income.
This should include the state pension, other pensions, earnings from employment and self-employment, and most social security benefits, such as Carer’s Allowance. However, not all benefits need to be included. For example, the following are not counted and shouldn’t be included in the calculation:
- Adult Disability Payment
- Attendance Allowance
- Christmas Bonus
- Child Benefit
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Social fund payments, such as the Winter Fuel Allowance
- Housing Benefit
- Council Tax Reduction.
People are most likely to be eligible if their total weekly income is roughly under £220. However, if their income is higher, they might still be eligible so it’s worth checking the Government Pension Credit calculator just in case.
Nearly 1.4 million pensioners in Britain are currently in receipt of the benefit, however, thousands more are thought to be eligible but aren’t aware of it. Pension Credit can be claimed by phone and online, ensuring that older people can apply safely and easily, wherever they are.
How much is Pension Credit worth?
There are two types of Pension Credit available – Guarantee Credit and Savings Credit. At present, Guarantee Credit tops up weekly income to a guaranteed level of £201.05 for single claimants, or a joint weekly income level of £306.85 for those with partners.
Savings credit provides an additional top-up for those who have made some provision towards their retirement by saving or contributing to a pension other than the basic state pension.
This is worth an additional £15.94 a week if they’re single, or £17.84 a week for those with partners.
People may get extra amounts if they have other responsibilities, conditions and costs to account for, making for a much-needed income boost to many in need. The full list of additional benefits, what a person can receive, and whether or not they qualify for each individual benefit can be found here
Alongside Council Tax Reduction, Pension Credit claimants may also be eligible for additional freebies, such as a free TV licence.
How to apply for Council Tax Reduction
Each local council runs its own Council Tax Support schemes, meaning how a person makes a claim might differ depending on where they live.
The first thing a person should do when making a claim is to contact their local council. People can find out what theirs might be by typing their postcode into this tool.
Who else may be entitled to Council Tax support?
People who have a low income and less than £16,000 in savings may still be entitled to some help towards their council tax bill.
For people who are not over the state pension age, the council tax support they’re entitled to is worked out under ‘working age scheme’ rules. People can also check the rules of this with their local council.
