What is Pension Credit?


Pension Credit is a tax-free income-related benefit for those who have reached the minimum qualifying age and live in Great Britain (GB). Pension Credit is paid for out of taxation. Your customer does not need to have paid National Insurance contributions to be eligible. The Pension Credit qualifying age is gradually going up to 66 in line with the increase in the State Pension age for women to 65 by November 2018 and the further increase to 66 for men and women between December 2018 and October 2020.
There are two parts to Pension Credit: Guarantee Credit and Savings Credit.
Guarantee Credit
Guarantee Credit provides financial help for people who have reached the minimum qualifying age and whose income is below a certain amount. The amount that applies to your customer depends on their circumstances and is called their ‘appropriate amount’. (This is called the appropriate minimum guarantee in the legislation.)
How much Guarantee Credit they may get will depend on the money they have, such as pensions and savings. Guarantee Credit is the difference between the money your customer already has coming in and their ‘appropriate amount’.
Savings Credit
Savings Credit is an extra amount for people aged 65 or over who have made some provision for their retirement (such as savings or a second pension) which brings their income above a level set by Parliament, called the Savings Credit starting point. (This is called the Savings Credit threshold in the legislation.) Customers can get Savings Credit with or without Guarantee Credit. They may still get Savings Credit even if their income is above their ‘appropriate amount’.
Changes to Savings Credit
As part of the Pensions Act 2014, the savings credit element of Pension Credit has closed to people who reach State Pension age on or after 6 April 2016. People who are already getting their State Pension, or who reached State Pension age before the new State Pension was introduced on 6 April 2016, will continue to have access to savings credit in line with the present rules. However if they are a member of a couple and the other member reaches State Pension age on or after 6 April 2016, they will not have access
to savings credit unless they were awarded savings credit before that date and have remained continuously entitled to it since then.
Who is eligible for Pension Credit?
There are two main rules about who can get Pension Credit. These are about age and residency.
Age: Your customer can only get Pension Credit if they have reached the qualifying age. If they have not reached the minimum qualifying age but their partner has, the partner can apply for Pension Credit. You can find out how we define a ‘couple’ – Couples
Residency: Your customer may only get Pension Credit if they live in Great Britain (England, Scotland and Wales) and they:
•have the right to reside, and are habitually resident, in the United Kingdom (UK), the Channel Islands, the Isle of Man or the Republic of Ireland, (this is known as the common travel area)
The habitual residence and right to reside rules are explained in the Habitual residence test.
If your customer has come to GB from abroad, they may be able to get Pension Credit, but this depends on their residence or immigration status and on their circumstances.
In some cases, customers may be able to keep Pension Credit if they leave Great Britain (GB) temporarily


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