Thousands of pensioners to lose £545 each due to Pension Credit loophole
Thousands of pensioners have been warned a Pension Credit loophole could see you at a "financial disadvantage". Around 900,000 Britons will be worse off once the move from their legacy benefit to Universal Credit and Pension Credit.
The Social Security Advisory Committee warned over the loss of transitional protection for this group which could cause them to lose out on extra cash. Transitional protection is money the Government gives as support to households as they move from other benefits to Universal Credit or Pension Credit.
The report said: "There is a potential risk that some people may take steps to move onto Pension Credit in the belief that this would be beneficial, but ultimately be financially disadvantaged." The Committee is urging pensioners on Child Tax Credits to carefully consider their options before changing to Pension Credit.
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The report states: "Pensioners currently in receipt of Child Tax Credit would lose their entitlement to transitional protection should they migrate to Pension Credit before they receive a formal migration notice from the Department.
"In the absence of any tailored communications for this group during the current take-up campaign, the Committee is concerned about the potential for confusion about what this group should do." The document states that those claiming Child Tax Credit could actually be worse off financially if they moved to claiming Pension Credit. Child Tax Credit is given to parents or grandparents looking after children aged up to 16, or in some instances children under 20 if they remain in full-time education.
On average, the amount you receive per year comes to £545, but this can increase depending on the number of children you care for or if they are living with a disability. But if you are already claiming the credit and then try to apply for Pension Credit, you will no longer receive the payments.
There are approximately 5,000 pensioners in this situation.