Anyone who has savings or investments worth over £6,000 could see their entitlement to pension credit upped (see the Pension Credit guide).
However, charities are calling on the Government to automatically pay eligible pensioners as £5 billion goes unclaimed (see the Pensioners overpaying tax MSE News story).
Approximately one in three eligible pensioners fails to claim pension credit. If you're one of those, you're missing out on free cash.
The Department for Work and Pensions (DWP) will now ignore the first £10,000 of savings older people have when calculating their income to determine the amount of pension credit benefit they receive.
Previously, the first £6,000 was disregarded. To calculate income, it is assumed those entitled to pension credit earn £1 a week per £500 of assets.
Minimum income guarantee
The key element of pension credit, for those 60 or over, means anyone single who earns less than £130 a week (£198.45 for couples) will get their income topped up to that amount.
Pensioners who additionally get housing benefit and council tax benefit will also have their first £10,000 of savings disregarded, up from £6,000 (see the Benefits Check-up guide).
The Government says the changes could mean half a million people will get up to £8 per week extra, at a £4 a week average.
Andrew Harrop, from charities Age Concern and Help the Aged, says: "This should encourage more older people on modest incomes to check whether they might be missing out on financial help which is rightfully theirs.
"This small improvement won't hide the fact that the system is failing to help many.
"Up to £5 billion goes unclaimed by older people each year and one in three entitled pensioners aren't claiming pension credit.
"This is why it is so important to move to a system of paying older people their entitlements automatically."
How to claim
If you're already receiving pension credit, housing benefit and council tax benefit, you'll automatically get any increased income so you don't need to do anything.
If you've yet to apply, or you were not previously eligible, but are now, then call the Pension Service on 0800 99 1234.
Also call that number if the value of your savings and/or investments has fallen, as you could be entitled to a larger payout. This cannot happen automatically as the Government will be unaware of the value of your assets.
Child benefit boost
Separately, any child benefit payments received will not count as income, from today, when calculating housing benefit or council tax benefit claims for those who are working.
The Government says about 200,000 households will be £20 a week better off as a result.
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