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Pension Credit changes

Pension Credit is a top-up benefit that takes your income and capital and other circumstances into account. Any changes to your situation during your claim could make a difference to the amount you should be paid. Some changes may mean that you're no longer entitled to Pension Credit. You have a duty in law to report changes that affect your benefit, as well as changes that are likely to occur.

If you or your partner are over 65, you may be given an assessed income period. This means that there are a number of changes affecting your retirement income that don't need to be reported until the end of the assessed income period, which runs for up to five years. If there is a change in your situation that is not one of those listed under the "assessed income period", you must report it to the Pension Service right away.

If you have an assessed income period, you do not have to notify changes to any income from:

  • retirement pension (other than, broadly, state retirement pensions)
  • an annuity (other than retirement pension income)
  • capital (for example, savings)

If you do not report a change in time, you could be seen as having failed to disclose a material fact (tell the Pension Service all the facts) about your situation, and if you provide information that is inaccurate, this could be seen as misrepresentation of your situation. This could mean that if you are paid too much benefit, you will have to pay it back.

However, if you're paid too much but you have done all you can to prevent this happening and the Pension Service has made a mistake, you may be able to argue that the overpayment should not be recovered from you. For information about overpayments and official error, see challenging a Pension Credit decision.

Changes that you should report include:

  • a change of address
  • if you move in with a new partner, get married, or split up with your partner
  • someone moves into your home or someone leaves
  • you are going away from home
  • you are having to care for someone
  • there are changes in your income or savings, including changes in your benefits, or you start to receive a pension from your former employer
  • you start work (part-time of full-time) or voluntary work
  • changes in your hours of work
  • you get a training place or you start part-time education
  • you change the account that you want your benefit paid into
  • you or someone you are claiming for goes into hospital or into a care home
  • you have taken in a tenant or lodger who is paying you rent

You should tell the office that usually deals with your claim, usually in writing or by telephone. If you report a change in writing, keep a copy of what you have written. If you are unsure whether or not a change will affect your Pension Credit, it is best to report it. You can also notify the Pension Service of any change of circumstances online.

If the change increases what you get (for instance your income has gone down or you qualify for additional amounts in your benefit), don't delay reporting it or you may lose money because your benefit may not be increased from the date that the change happened (backdated).

The government's official online source of information on benefits is GOV.UK.

Click on the bars below for more detailed information on making changes to a Pension Credit claim.

How a hospital stay can affect Pension Credit

If you're a hospital inpatient, this can affect your entitlement to Pension Credit. You remain entitled to your benefit, but the way it is calculated changes as time goes by.

To be counted as an inpatient, you must be in a hospital (NHS hospital, armed forces hospital and special hospitals, but not prison medical wings) or a "similar institution", such as a care home, hospice or rehabilitation unit that provides medical care, and the treatment is funded by the NHS.

If you're in a care home and you have more than "incidental" nursing needs, the NHS should assess your case to decide if you qualify for NHS help with your accommodation costs. Seek help and independent advice to discuss this.

If you're a private patient, you're meeting the cost of your treatment in a private hospital, or your placement was arranged by a local authority (even with some NHS contribution to the costs of nursing care), you should not count as a patient.

If you go into hospital, this is a change of circumstances that you must report to the Pension Service. Call them on 0845 606 0265.

If you're a patient detained under section 45A or section 47 of the Mental Health Act, you're not entitled to benefits.

Various benefits, such as Disability Living Allowance, Attendance Allowance and Carer's Allowance, will stop when you have been in hospital for more than a certain time. It is important to seek help to find out which benefits stop at what time and to report these changes.

Disability Living Allowance and Attendance Allowance stop after you have been in hospital for four weeks. Because of this, your severe disability additional amount will also stop. This may mean that the amount of pension credit that you get reduces or stops altogether. Carer's Allowance stops after 12 weeks (in other words, eight weeks after the Disability Living Allowance or Attendance Allowance of the person you're caring for). Any additional amounts you get also stop at this point.

After 52 weeks as a hospital inpatient, your housing costs (for mortgage interest and service charges) will usually stop, unless it can be argued that you're not likely to be in hospital "substantially longer" than 52 weeks. If you have a partner, they may be able to claim benefits in their own right at this point. Seek help and advice to check what is possible.

If you are part of a couple, you and your partner will be treated as single people if you are going to be in hospital for "significantly more" than 52 weeks. Your benefit entitlements will then be assessed separately. Seek help and advice if this is likely to happen.

For more information, see going into hospital or the Age UK leaflet on going into hospital (PDF, 567kb).

How care home stays can affect Pension Credit

Your benefits may be affected by a stay in a care home. This depends on whether you're there for a temporary stay or a permanent stay. It is also possible to be in a care home for a "trial" period to see if it is what you want.

If you go into a care home, your Pension Credit does not stop. However, some benefits such as Attendance Allowance (AA), the care part of Disability Living Allowance (DLA) and Carer's Allowance, might stop. This means the severe disability and carer additional amounts you receive because you get these benefits may also stop. DLA and AA stop after four weeks. Carer's Allowance stops after 12 weeks, eight weeks after the DLA or AA of the person you're caring for.

Your benefit will usually go toward paying the costs of being in a home. You should, however, be left with a personal allowance of £22.60 per week.

If your stay is for a trial period, you can continue to get housing costs as part of your Pension Credit for up to 13 weeks. If your stay is temporary (for respite care), you usually continue to be paid housing costs for up to 52 weeks.

If you enter a care home on a permanent basis, your Pension Credit claim may be treated differently. If you're in a couple when you become a permanent resident (other than in an Abbeyfield Home), you're treated as a single person. This also applies if you and your partner both move into a care home permanently, even if you occupy the same room.

When you make a claim as single people, your capital and your partner's capital are no longer counted together. If your joint income was too high for you to receive Pension Credit, you may find that you are entitled to it when you move into a care home permanently.

If you own your home and you're a permanent resident and do not intend to return home, your house will be treated as capital (which may mean that you're no longer entitled to Pension Credit) unless:

  • it is occupied by your partner (but not if you're estranged or divorced)
  • it is occupied by your partner or a relative as their home if that person is over 60 or incapacitated
  • it is occupied by a former partner from whom you are estranged or divorced, but only if they are a lone parent
  • you're taking steps to sell the property – its value will therefore be ignored for 26 weeks, or for longer if it is reasonable to in the circumstances

How studying could affect your Pension Credit claim

You can claim Pension Credit Guarantee Credit if you have reached the qualifying age (see about Pension Credit), and Savings Credit if you or your partner are over 65.

Students are not excluded from Pension Credit, so you can study part-time or full-time. If you are below the qualifying age but your partner has reached the qualifying age, they can claim Pension Credit and you can study under the more generous Pension Credit rules.

Student income is also more generously treated under the Pension Credit. Student grants and student loans aren't taken into account as income for Pension Credit purposes.

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Page last reviewed: 20/05/2013

Next review due: 20/05/2015

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