Pension Credit and Universal Credit

I am aware of media reports about Pension Credit and Universal Credit, which have caused concern. To clarify, the change only relates to Pension Credit eligibility for couples and does not affect the State Pension Age. Ministers have explained that this will not be a retrospective change. Couples with one partner under State Pension Age who are already in receipt of Pension Credit or pension-age Housing Benefit at the point of change will be unaffected while they remain entitled to either benefit.

This change means that the same work incentives will apply to the younger partner as well as other people of the same age, and ensures that taxpayer support is directed where it is needed most. I would also note that Pension Credit has a 100 per cent withdrawal rate for earnings over a small threshold (£10 per week, for most couples), whereas Universal Credit has a 63 per cent withdrawal rate over a much larger work allowance.

This complements the actions being taken to help older workers. Ministers published “Fuller Working Lives: A Partnership Approach” in February 2017 which explains how working longer can benefit individuals, businesses and the economy, as well as setting out a number of new actions that will be taken to support this. I am pleased that the default retirement age has been abolished so that in most cases employers can no longer force employees to retire just because they reach retirement age. Ministers have also extended the right to request flexible working to all employees.

I hope this clarifies the Government’s approach towards reforming the welfare system and helping older workers, and I will continue to follow these issues closely.

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