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Pension Credit

Volume 492: debated on Tuesday 12 May 2009

To ask the Secretary of State for Work and Pensions whether he plans to change the upper capital limit for pension credit for those who qualify for only the savings credit element; and if he will make a statement. (272002)

[holding answer 30 April 2009]: There is no upper capital limit in pension credit. Those customers in receipt of the guarantee element of pension credit have linked entitlement to full eligible housing benefit and council tax benefit. However customers who are only in receipt of the savings credit element of pension credit are still subject to the upper capital limit of £16,000 in housing benefit and council tax benefit.

In the 2009 Budget the Chancellor announced that the capital threshold for pension credit (and housing benefit and council tax benefit for those who have attained the qualifying age for pension credit) will be increased from £6,000 to £10,000, bringing it into line with the threshold for those living permanently in care homes. This will allow these customers to retain up to £10,000 of capital before it affects their benefit.

The change will take effect from November 2009 and will apply to all pension credit customers, that is, to people in receipt of guarantee credit only, savings credit only or both guarantee and savings credit, as well as all pension age housing benefit and council tax benefit customers.

The Government recognise the importance of supporting pensioners appropriately through the economic downturn. Increasing the capital threshold from £6,000 to £10,000 represents a generous increase in the thresholds and means that the proportion of pension credit recipients who will see their capital fully disregarded rises to 88 per cent. Half a million pensioners stand to gain from this change, with an average weekly gain across all benefits of £4.