State Pension (Non) Increase.

[10ClarionSt]

The forhtcoming rise in state pension will be a big whammy for some pensioners who are on Pension Credit because it will take them beyond the qualifying threshold and disqualify them from entitlement. I know a couple of people who experienced this last year. Add to that the proposed rises in water rates and council tax, plus not being eligible for the WFA, all adds up to more hardship for senior citizens.  

[newmodarmy]

I assume those in receipt of pension credit will have a total income (excluding things like DLA) which is below the tax threshold, so tax won't be a factor. But I'm puzzled as to why government sites stress Pension Credit is non-taxable- why mention that if a recipient is always going to be below the threshold for tax?  Perhaps there is a factor I've missed.

[david small]

They give a fiver, then take back six. We are like cows being milked.

[barry1010]

I nearly spat my coffee out when I just read that those on pension credit get a discount on their Royal Mail Redirection Service if they move house.

[THECORBYLOON]

NMA, I had a quick look through the guidance for various income-related benefits and there are mentions about their being tax-free so it's not peculiar to Pension Credit (PC).

As the name of the benefit contains the word, "Pension" and both Retirement Pension and State Pension are taxable, there might be folk thinking PC is also taxable. 

[newmodarmy]

Thanks thecorbeyloon. I still don't see the logic of PC being treated as non-taxable income while state pensions do count as taxable income- especially in those cases where PC tops up your income to around the new state pension figure which is below the tax threshold.  I can only assume some people get PC even though they have other earnings which push them above the threshold. I'm not losing sleep over it though- I'm well out of the range of PC so it doesn't affect me.

[THECORBYLOON]

When Incapacity Benefit (IB) was introduced in 1995, the highest rate was taxable and it would be deducted at source.

 

If a claimant was getting the taxed IB and also received Income Support, only the taxed IB was taken into account.

 

That meant one section was deducting the tax and another was paying it back...

[10ClarionSt]

Thanks again folks for those replies. I am in the same situation as Vulcan. I have a small private pension that excludes me from claiming PC. Whenever there's a rise in that, or state pension, the tax increases and the private pension gets smaller.

What I don't understand is how someone on PC is eligible for WFA, when someone with a small private pension, such as me and Vulcan, aren't eligible for WFA. The PC is supposed to be a leveller, so, being levelled by PC  gets you WFA, but anyone on the same income doesn't get WFA. I don't get it. 😒

[barry1010]

Pension Credit is not a leveller; it levels the amount of pension with additional benefits that can be worth more than £4k if the recipient pays rent or mortgage.