Thousands of pensioners set to lose payments of up to £70/week from April
Eleven-thousand pensioners are set to lose payments worth £70 per week from April, when the Government cuts extra payments for 'adult dependants', according to new data released today.
At the moment, those receiving the state pension may be eligible for an adult dependency increase (ADI). This is a payment of up to £70 per week on top of your usual state pension, for a partner who is financially dependent on you.
Although these extra payments closed to new applicants in 2010, those who were already receiving the increase were able to carry on claiming it.
But from 6 April 2020, all these payments will stop, regardless of when you started claiming.
And over 11,000 pensioners are set to lose the payment as a result, according to data obtained from the Department for Work and Pensions through a Freedom of Information request from pensions firm Royal London.
For someone claiming the maximum payment, this would mean an annual drop in income of £3,640. But you may be able to apply for pension credit or universal credit to make up for this loss – see below for more info.
See our State Pension guide for more info.
What is the adult dependency increase?
The adult dependency increase is a weekly payment which is added to the recipient's basic state pension.
Its purpose is to provide for another adult who is financially dependent on you – such as a partner who doesn't receive their own state pension.
How much the payments are worth depends on which category of the old state pension you have (those receiving the new state pension won't have been eligible, as applications for the payments were closed in 2010):
- £70 per week for those with category A old state pensions, which are based on your national insurance contributions.
- £41.90 per week for those with category C old state pensions, which are for those aged 80 and over and aren't based on contributions.
All payments for the ADI will stop from 6 April 2020.
But while no one will be eligible to carry on receiving it, you may be able to receive other Government help to supplement your state pension.
The Department for Work and Pensions says that if you're already receiving a means-tested benefit such as pension credit or universal credit, this will increase to offset the loss of your ADI – so your income should stay the same overall.
If not, you should check if you'll be eligible to receive pension credit after your ADI stops. This will top up your state pension if you meet certain criteria.
There are two elements to pension credit:
- Guarantee credit tops up your weekly income if it's less than £167.25, or £255.25 for couples.
- Savings credit is an extra payment for those who have some money saved towards their retirement. It's worth up to £13.73 per week for a single person, or £15.35 for couples. You'll need a minimum income of £144.38, or £229.67 for couples.
See our Pension Credit guide for more info on how to claim.
If you're in a mixed-age couple, where one partner is below state pension age and one partner is above, you won't be able to apply for pension credit due to a rule change last year. If this applies to you, you may be able to apply for universal credit instead – our Universal Credit guide has full info.
'It will come as a nasty shock to 1,000s to see their state pension cut'
Steve Webb, director of policy at Royal London, which uncovered the data, said: "It will come as a nasty shock to thousands of people to see their state pension cut by up to £70 per week.
"It seems penny-pinching of the Government to take this money away when the addition is gradually working its way out of the system in any case. Losing over £3,500 per year overnight will make a material difference to the standard of living of those who are affected."
What does the Government say?
A Department for Work and Pensions spokesperson said: "The ending of ADIs was part of a package of reforms introduced in 2010, which meant that overall more women received the full basic state pension and more generous national insurance credits for carers were introduced.
"After 6 April 2020, current ADI recipients may be eligible for a means-tested benefit such as universal credit or pension credit. Those already in receipt of a means-tested benefit should see no change to their income as the loss of the ADI will be offset by an increase in their means-tested benefit."