James Simpson and Lucie Glover provide a comprehensive guide to the range of welfare benefits available to older clients
The welfare benefit landscape has changed significantly in recent years, affecting claimants of all ages, and older individuals are no exception. The system overhaul afforded by the introduction of Universal Credit impacts those who are pre-retirement, and changes to eligibility or rates for state pension (SP), attendance allowance (AA) and other social security payments affect those beyond it.
This article, based on a piece originally published in PS (May 2016), summarises the current position in England and Wales to assist in advising your older clients. We also highlight some particular benefit, allowance and reduction scheme options that can be overlooked or are not claimed as widely as they could be.
Although the changes introduced under the Pensions Act 2014 are now bedded in, there are still many people who fall before 6 April 2016 divide, and have their SP entitlement calculated differently. As such, it is vital to be aware that the two systems coexist. However, for brevity, we focus here on the ‘new’ SP, on the assumption of advising clients who have recently, or have yet to, reach their SP entitlement age.
The creeping increase in SP entitlement age has been the subject of much debate. The government offers an online service to check entitlement ages.
Once they are approaching their SP age (and typically between two and four months before that date), clients should receive a letter containing a claim code and inviting them to claim. It is now possible to make a claim online at up to four months prior to your SP age date, whether the letter is to hand or not.
If the date has already passed, it is still possible to make a claim and payments can be backdated to the date the person reached entitlement age. If they do nothing, SP is automatically deferred, which can result in increased payments when they do eventually claim it.
In 2021-22, the maximum rate of new SP is £179.60 per week. An individual will be entitled to the maximum rate if they have made 35 years’ worth of National Insurance (NI) contributions or claimed 35 years’ worth of NI credits. The calculations differ for NI records before and after 6 April 2016.
If there are fewer than 35 qualifying years on the person’s record, their entitlement will taper off and if there are fewer than 10 qualifying years of NI contributions or credits, they will not be entitled to new SP.
The creeping increase in state pension entitlement has been the subject of much debate
It is important to note that, if your client has not made enough NI contributions or received sufficient NI credits to claim SP, they may still be eligible for pension credit or other state support.
SP is taxable and is considered ‘income’ for the purposes of entitlement to numerous other benefits.
There are two distinct parts to pension credit (PC): guarantee and savings. Guarantee credit tops up the claimant’s retirement income to a government-set level and savings credit acts as an extra amount if the person has previously saved for their retirement, or has income higher than their basic SP.
It is still possible for an individual to claim savings credit when they reached their SP age prior to 6 April 2016, but that element has otherwise been phased out.
Guarantee credit is still available regardless of whether the individual reached SP age after 6 April 2016. The current weekly income levels set by the government are £177.10 for individuals, and £270.30 for couples. The top-up amount tapers off where the claimant has savings over £10,000.
Most sources of income are counted when calculating entitlement to PC, but certain benefits do not count as income (mostly non-means-tested payments such as the personal independence payment (PIP) or AA). Further, even if the person’s weekly income exceeds the government thresholds, they may still be eligible to receive PC if they are severely disabled or are responsible for paying housing costs, such as rent or a mortgage. It is worth noting, however, that help with interest payments on a mortgage is now in the form of a loan, repayable on sale of the property or on the claimant’s death.
Entitlement to PC can act as a gateway to other support options, such as council tax support schemes and old-style housing benefit. It is always worth exploring the client’s entitlement, as PC can be overlooked and is estimated to be under-claimed by up to 40% of eligible people.
It is possible to claim PC online, calling the main Department for Work and Pensions office on 0800 991 234, or by printing and completing the claim form and applying by post. The advantage of claiming online or by phone is that AA can be backdated to the date on which the claimant initially contacted the DWP to begin the claim.
AA is a non-means-tested benefit for those who have care needs and are over SP age, and again, it can be easily overlooked. If the individual has not yet reached their SP age, they will instead need to claim PIP. If the person is already receiving PIP or its predecessor, disability living allowance (DLA), then those payments will continue, and AA cannot be claimed at the same time.
If it is still possible for a client to claim PIP, that can sometimes be advantageous, as an additional amount of PIP is claimable for help with mobility needs (whereas AA is simply for ‘care’ needs more generally). A person can claim AA where they have a physical or mental disability (or both), require help or supervision, and have needed such for at least six months. There are special rules for terminally ill people, which make it easier for them to obtain AA.
Eligibility for AA is based on the help required, not on the actual care the person may be receiving. The main purpose of AA is to help the recipient stay independent in their home, although the funds do not necessarily need to be spent on their care. AA payments are tax-free and typically do not impact the person’s entitlement to other benefits.
There are two rates of AA: the lower rate (currently £60 per week) and the higher rate (currently £89.60). The lower rate is payable where the claimant requires help during the day or at night, the higher rate where the claimant needs help both day and night.
It is important to note that, where the claimant lives in residential care, they will only continue to be entitled to AA on a permanent basis if they are self-funding their placement. Where the placement is partly or fully funded by the local authority (or by the NHS, such as through continuing healthcare), the individual’s entitlement to AA will be suspended after 28 days. The same applies if the claimant is in hospital.
Personal independence payment and disability living allowance
Although PIP and DLA are benefits that can only be claimed by working-age individuals, they are worth exploring due to their interaction with AA and payments continuing after the claimant reaches SP age, if they were claimed beforehand.
PIP is a non-means-tested benefit for those who have a disability or long-term health condition and require assistance and have not yet reached SP age. Although claims are made before the age of 65, once this benefit has been awarded it will continue after this age if the eligibility criteria remain satisfied. The same applies to DLA, the predecessor to PIP. The majority of DLA claimants have been reassessed for PIP over the past several years, and this transition is compulsory when the claimant receives a letter from the DWP advising that they must make the switch.
PIP has a daily living component and a mobility component, both of which have a standard and an enhanced rate. The claimant may be entitled to either component, or both. For 2021-22, the daily living component rates are £60 (standard) and £89.60 (enhanced) per week, the same as the current AA rates. The mobility component rates are currently £23.70 (standard) and £62.55 (enhanced) per week.
As alluded to above, if it is possible for a client to claim PIP, it can be preferable to do so instead of waiting to claim AA once they reach pensionable age. This is because PIP contains a mobility component, whereas AA does not. A further advantage is that although daily living component payments will stop from the 29th day the claimant is in residential care (as with AA), mobility payments can continue.
However, the PIP claim process can be complicated, and the claim form is lengthy and detailed, which is worth highlighting to your client or those who assist them.
As with most DWP decisions, it is possible to request a mandatory reconsideration if the initial claim is refused, and there is a formal appeal process via the HM Courts & Tribunals Service (HMCTS) if the outcome is still not satisfactory. The successful appeal rate against PIP claim refusals is high, although appeals can take many months (and sometimes upwards of a year) to be heard and determined. Awards can be backdated following an appeal, but that would typically take the form of a lump sum payment, so the claimant would go for a long time without regular payments pending an appeal outcome.
Carer’s allowance (CA) is a benefit for those who care for a disabled person for at least 35 hours per week. The disabled person must receive a qualifying benefit such as AA, the DLA care component (at either the middle or higher rate), the PIP daily living component (at either rate), or an armed forces independence payment.
There is no upper age limit, and the carer can claim even if they have never worked, as entitlement is not dependent on NI contributions. It is non-means-tested, a taxable benefit and gives NI credits if the claimant is under pensionable age. For 2021-22, the weekly rate is £67.60.
The disabled person will not be able to claim the severe disability premium for their own means-tested benefits, and it may therefore not always be financially beneficial to claim CA due to the overlapping benefits rules and the potential impact on the benefits of the person receiving the care.
The overlapping benefits rules mean that CA cannot be paid if the claimant receives the same weekly amount (or more) from certain other benefits, including SP. However, even if that is the case, the individual may be entitled to a carer’s premium as part of their other benefits, so it’s worth claiming CA to effect that.
If the claimant goes into hospital, their CA will stop after 12 weeks. If the person being cared for goes into hospital, the carer’s CA will stop when that person is no longer in receipt of a qualifying benefit (for example, their AA payments stop from their 29th day in hospital).
CA is not a complex benefit, but its relationship with other benefits is very complicated. It is important to review your client’s circumstances and advise them of the possible impact before claiming.
Housing benefit (HB) is still claimable in certain circumstances, such as by individuals who have reached PC age or been placed in temporary accommodation by their local authority after becoming homeless. However, housing payments are now generally covered under Universal Credit for working-age claimants.
HB is means-tested and in general the prospective claimant must be on a low income and have capital of below £16,000. The payment amounts are calculated based on the combined capital and income of the claimant and their partner (if applicable). If the person is in receipt of guarantee PC, they will be automatically entitled to the highest level of HB for their local authority area.
The rent paid for the claimant’s accommodation may not be the same as the HB payments they are receiving. This is usually because certain charges (for example, utility payments and support charges) are excluded from HB calculations. A council tenant would, for example, be entitled to the maximum rate of HB less the ineligible charges they pay such as heating, cooking, hot water, lighting etc.
A private tenant’s HB entitlement is more complex. No deductions are made if the claimant or their partner are in receipt of AA, the daily living component of PIP or the care component of DLA, or registered blind.
It is worth bearing in mind that support with rent is available within the scope of other benefits that your client may be entitled to or already in receipt of, such as PC.
Council tax support
Council tax support schemes (CTS), also sometimes known as ‘council tax reduction’, are now administered by each local authority and vary accordingly.
If the individual has a severe mental impairment and is entitled to AA, the PIP daily living component, the DLA care component, PC or certain other benefits, then they may be entitled to CTS in some form. Of note is that someone in receipt of guarantee PC is typically entitled to full CTS. If receiving the savings PC, the amount of CTS available will depend upon the level of savings of the claimant.
CTS is means-tested and, critically, only available where the individual has less than £6,000 in savings (or more if that capital is disregarded, for example, if it is a personal injury compensation payment held in trust or under certain other circumstances), unless they are in receipt of an income-based benefit such as income-related employment and support allowance.
A council tax exemption might be available if the client’s property is unoccupied due to them moving into a care home, or occupied solely by them and they have a severe mental impairment. It is possible to claim such an exemption retrospectively after the individual has passed away if it was not claimed during their lifetime, but the extent of this support will differ between local authorities.
Carer’s allowance is not a complex benefit, but its relationship with other benefits is very complicated. It is important to review your client’s circumstances and advise them of the possible impact before claiming
A disability reduction scheme is also available if the person’s home has features or adaptations which make it suitable for someone with a disability to live in. If eligible, then the council tax bill will be reduced to a lower band level.
As CTS, exemption and reduction schemes are administered by local authorities, it’s best to enquire or search the relevant local authority website for further details of what is available in the prospective claimant’s area.
Other benefits, discounts or exemptions
TV licence concessions
Eligibility for free TV licences was significantly restricted from 2020. It is worth noting that individuals in receipt of PC are still eligible for a free licence.
If your client is in residential care, it is important to check whether they are covered by an accommodation for residential care (ARC) licence held by the care home, as they would not require an individual licence in that case.
Office of the Public Guardian and Court of Protection fee exemption or remission
If your client is considering making lasting powers of attorney, they may qualify for a remission of or exemption from the Office of the Public Guardian’s (OPG) registration fee if they have a gross annual income of less than £12,000 or are in receipt of certain means-tested benefits. The application should be made using form LPA120 (which gives detailed guidance on the criteria) and ideally when submitting the documents for registration.
If an individual has a deputy appointed by the Court of Protection (COP), they may be entitled to a remission of or exemption from the annual supervision fees (or initial deputy assessment fee) based on similar criteria to those above. These can be claimed using form OPG120 which, again, contains detailed guidance on the relevant criteria.
If making an application to the COP on someone’s behalf, it is possible to apply directly for a fee remission or exemption using form COP44A. The thresholds are different to those for the OPG fees, and it is important to answer the questions in the form accurately.
Other ancillary benefits
Your client may be entitled to a blue badge for disabled parking, free NHS prescriptions, free glasses, free dental treatment, a senior railcard or local authority bus pass, or certain additional social security payments such as a cold weather payment, winter fuel payment or bereavement payment.
Certain organisations or attractions may also offer discounted entry or membership on production of a DWP entitlement letter, such as for PIP, for the recipient and/or their carer.
The UK Cinema Association offers a CEA card, which enables people in receipt of certain disability benefits (including AA, PIP or DLA) to visit the cinema with a carer or friend who can attend free of charge.
Disregarded income or capital
It is worth briefly noting that your client may still be entitled to various means-tested benefits where their income or capital exceeds the usual upper limit but the source of that capital qualifies as ‘disregarded’. Examples of such disregarded funds include a property occupied by the person as their home, or personal injury compensation payments which are held under certain circumstances, such as being administered by the court on the person’s behalf.
Such funds can be disregarded for a set period (for example, 12 months) or for the entire length of the person’s claim. If you feel this may apply to your client’s assets, it is worth contacting the DWP for further information or reviewing the decision makers’ guide (available online) for the benefit in question.
The benefit cap
There is a cap on how much an individual is entitled to claim across multiple benefits. The cap varies by area and whether the person is single, or part of a couple. The current caps range from £13,400 annually (for single people anywhere outside Greater London) to £23,000 annually (for couples or single parents within Greater London).
The majority of means-tested benefits are included in the scope of the benefit cap. However, a person will be exempt from the cap if in receipt of certain benefits including PIP, AA or CA amongst other less common payments, such as a war disablement pension.
Challenging welfare benefit decisions
Decisions about the benefits discussed in this article are made by the DWP, with the exceptions of HB and CTS and the various ancillary benefits. In those instances, the individual should liaise with the local authority or professional body directly to confirm its review process.
To appeal a benefit claim decision, the individual should ask for a mandatory reconsideration within one month of the date of the original decision. The original DWP decision letter will contain practical details on how to do this. Following a reconsideration (which could take several weeks following the request), the benefit could be increased, reduced, stopped, or kept the same. The new decision is effective from the date of the original decision or the date of the change in circumstances.
If the person later becomes aware that the original decision was wrong, they could, in limited circumstances, ask for an ‘any time’ revision or supersession. If the original decision was wrong, a revision will apply from the date of the original decision, whereas supersession does not replace the original decision but still can increase, reduce, stop, or keep the same the benefit in question. The benefit awarded under a supersession is likely to be payable from the date of the change in the circumstance or the date of the new decision.
Once the DWP has issued a revised decision following the mandatory reconsideration process, the individual can appeal (unless there is no right of appeal in law) within one month from the date of the revised decision. It may be possible to make the appeal later than this, but there needs to be good reason for doing so. Such appeals are made to HMCTS and a tribunal hearing to hear the evidence will usually be arranged for all parties to attend (such hearings have taken place virtually during the pandemic). The tribunal’s decision will be issued in writing. Following the tribunal’s decision, only in very limited circumstances can a further appeal be made on specific legal grounds to the Upper Tribunal.
We hope that this updated review of sources of financial support for older people has provided you with some basic knowledge of the main welfare benefits to which your clients may be entitled.
The government publishes guidance as to how DWP decision-makers consider benefit applications and mandatory reconsiderations. The volumes are comprehensive and are updated to accommodate changes in the law.
If there is doubt as to your client’s possible eligibility for any benefit, it is worth reviewing this guidance or advising them to contact the relevant DWP office to discuss their circumstances.