PENSION CREDIT

The benefit consists of two elements;

o Guarantee Credit

o Savings Credit

Both of the elements are assessed independently and have differing age limits. It is therefore important to recognise that individuals may have an entitlement to either or both components.

The Guarantee Credit is available for people aged 60 and over. It is broadly a replacement for the current Income Support system with benefits paid at generally the same rates. The Guarantee Credit will ensure that individuals receive a minimum amount of weekly income which reflects their circumstances and needs. This is known as the appropriate or applicable amount. The basis of Guarantee Credit is the Standard Amount as detailed below:

This will be increased by a series of premiums or extra amounts if you have a disability, or are a carer or have relevant housing costs. The most relevant of these premiums for individuals in care is the Severe Disability Premium. This is applicable if you receive Attendance Allowance or the middle or higher rate of the care component of Disability Living Allowance (DLA). The additional premium is £53.65 and eligibility will be subject to no one receiving the Carers Allowance for looking after you.

If your income is less than your applicable amount, the difference will be made up by Guarantee Credit.

Your income will be calculated as being the amount you receive, excluding any disregarded amounts such as Attendance Allowance. In addition, an amount will be included in respect of the "notional" income generated from your savings. This is taken to be £1 per week for every £500 of capital. The first £10,000 of savings are excluded if you live at home or if you are permanently resident in a care home.

The Savings Credit component of Pension Credit is available to individuals aged 65 and over who have income from their savings or have a personal or occupational pension.

If your qualifying income is higher than the savings credit threshold, but below a given maximum, then you will be entitled to receive Savings Credit.

o Savings Credit Threshold

The amount of entitlement is calculated as 60% of your "qualifying income" above the savings credit threshold, subject to a maximum of £20.52 a single person and £27.09 for a couple.

The amount of Savings Credit payable may however be subject to a reduction at the rate of 40% of the amount of qualifying income above the applicable amount.

People aged 60 and over who live permanently in residential or nursing homes will be entitled to Pension Credit instead of Income Support and in such circumstances, the higher level of capital will be disregarded, i.e £10,000.

Under the terms of Pension Credit, it is possible for care residents to qualify for some support, even with capital assets of up to £79,950.

This is a complex benefit and we would recommend that you request a copy of our bulletin on this benefit for full details how to calculate your entitlement.

The Pension Credit Helpline can be contacted on 0800 991234

	Pension Credit Bulletin For a comprehensive introduction to the benefit
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