The New Anti Trophy-Wife Measures in Pension Credit
by Gareth Morgan on February 20, 2011
Pension Credit has been the benefit for those, in a couple, when the oldest member has reached 60. Most recently that age has been rising as the QASPC, (Kwasp -See) – Qualifying Age for State Pension Credit, rules come into force.
Now it will not be payable until the youngest person reaches QASPC.
As the explanatory notes to the bill say:
a member of a couple who has attained the qualifying age for state pension credit may not receive state pension credit if the other member of the couple has not attained that qualifying age. This is to ensure that all claimants who have not attained the qualifying age for state pension credit are required to claim universal credit and, if appropriate, be subject to work-related conditions of entitlement.
So, if you have a younger partner, you are going to stay on the lower rates that under QASPC benefits offer.
Research shows that age gaps in marriage are quite diverse, and the most common age differences are not very frequent. In 2001 the most common age gap of 1 year occurred in just one tenth of all marriages, half of all gaps were in the range –1 to 6 years and three quarters were between –4 and +8 years.
The figure is derived, somewhat traditionally, by subtracting the wife’s age from the husband’s. So minus figures mean a wife who’s older than her husband.
There are 2.6 Years average age difference between spouses, allowing, presumably for older wives, we should expect the real differences to be larger
The lost benefit from this change, in the simplest form, is, in current figures:
JSA Rate couple PC rate couple Difference Annual
£102.75 £202.40 £99.65 £5,181.80
So, the 2.6 years total loss is £13,472.68
I can see a worse-off calculation and campaign here. Should someone finish work and claim Pension Credit while the current ‘older claimant rule’ is in force or continue earning and get hit by the ‘younger claimant rule’? Is this ‘family focussed’ government going to find that it’s encouraging divorce and separation?
Comments
They could in theory include a pensioner premium or equivalent in UC to ensure no financial loss, albeit there is no mention of this in the UC section.
Richard Atkinson
They could. The intention, expressed in the DWP explanatory note above, is not to.
You say: “I can see a worse-off calculation and campaign here. ”
Changes generally produce losers as well as winners (and even if ‘everybody gains’, it is unlikely that everyone will gain to the same extent). This in itself can not be a reason to criticize a new measure.
To evaluate a new measure one would need to establish what the previous measure was supposed to achieve, how well it did so (and at what cost), and how the new measure compares to the original one.
So the first question is: what was the intention of the original Pension Credit in the first place?
The intention was to recognise that older people have greater needs. They need more heating, they are less mobile and often require help.
It’s certainly arguable that they’ve been the ‘deserving poor’ of the last administration and have been ‘winners’ in the process.
It’s not been made clear what the position of someone who is already getting Pension Credit, with a younger partner, will be if this rule is introduced. The transitional protection statement applies only to Universal Credit.
I think the premise that older people have greater needs is debatable. Some older people have greater needs, but not all. Some people that are not older need more heating, are not very mobile and require help.
Both the existing and the new measure map these needs on a particular age range in a way that does not accurately reflect reality. People don’t suddenly have these needs the moment they (or their partners) turn 60.
I’m not an expert in benefits, but ISTM that the simplistic, rule-based entitlement of benefits is hindering, rather than helping an efficient allocation of the available resources to those whose need is the greatest.
I wouldn’t disagree with much of that. The broad-brush approach, that replaced a more personalised system in 1988, was designed to simplify the system (and make it ‘easy’ to computerise).
The discretion that can help to recognise individual need can also be used to discriminate though and that is an advantage of a regulatory system.
IMV the alleged advantages (simplicity and ease of computerization) of a simplistic age-rule-based system should really be properly costed, notably in terms of misallocated resources (how many people who really need the benefit fail to get it, how many people who *don’t* need it fail to get it).
If the intention is to help impecunious people with specific needs, then establishing how impecunious they really are, and what needs they have, seems a sensible thing to do, rather than make the assumption that anyone above a certain age (or, even more bizarre, with a spouse above a certain age) is impecunious and needy.
I
That’s exactly what means testing is meant to do. The issue here is that the means test, which like all similar schemes, looks at
How much do you need?
How much have you already got?
And then makes up the difference (some means tests, like Housing Benefit, start off with the needs figure and then reduce benefits when you have more than you need by a proportion of the excess income).
The extra benefit for the elderly is caused by the ‘needs’ figure being set, at a personal level, at about twice the level of younger people. It’s also set at a higher level than the basic state pension so that those without a private or occupational pension are entitled to a Pension Credit top-up.
That’s exactly what means testing is meant to do. The issue here is that the means test, which like all similar schemes, looks at
How much do you need?
How much have you already got?
I think means testing is good for benefits. No, make that: I think means testing is *essential* for benefits. ISTM there is no unconditional, sudden step change in either the needs or the means of people who reach their th birthday.
I may be misunderstanding you, but why is checking what people need and what they already have an issue?
The extra benefit for the elderly is caused by the ‘needs’ figure being set, at a personal level, at about twice the level of younger people. It’s also set at a higher level than the basic state pension so that those without a private or occupational pension are entitled to a Pension Credit top-up.
What is the reasoning behind this indiscriminate rule?
I’m not arguing against means testing here. I’m pointing out that the benefit is being means tested.
The question is whether the appropriate ‘needs’ figure is being applied.
That’s a broad brush issue. Various governments, and studies, have decided or shown that the elderly have more needs that the young. Governments have decided not to personalise or gradualise that transition.
That’s a political decision and entirely unrelated, I’m sure, to any evidence that the elderly vote more than the young.
I guess it’s a combination of cock-up (for the sake of simplicity define entitlements on the basis of age, irrespective of actual need) and conspiracy (pamper those who tend to vote more).
If there was to be a Pensioner Additional Amount in UC, would it be likely to make up the difference between the JSA couple rate and the Pension Credit rate?
Probably not; I’d expect it to be more the single person rate.
This is a means tested benefit for poor old peaple
The New Anti Trophy-Wife silly silly statement to make
sounds like your talking about rich peaple?
the money is a pitance have you seen the price of food.
make the poor poorer that what its all about
the name of the game universal credit