‘I get Attendance Allowance and state pension top-up – will cost of living payments stop my Pension Credit?’
People on Pension Credit could qualify for the £900 cost of living payment scheme
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Most eligible people will have received the second instalment of the £900 cost of living payment by the end of this week, and pensioners should see the pensioner cost of living payment this month or next via the Winter Fuel Payment.
The one-off payments are intended to help qualifying people with the additional costs they’re currently facing.
While many will need to use the extra income to pay for things such as their energy bills, some may wonder if the payment affects benefit eligibility if they don't use it immediately.
GB News reader Jim, whose name has been changed, got in touch with the GB News Money team, who investigated the matter.
Do you have a money story you'd like to share or a financial question you'd like the experts to answer? Get in touch by emailing money@gbnews.uk.
Cost of living payments could help towards high energy bills this winter
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Jim, who has reached state pension age, explained he’s been able to put the cost of living payments into a savings account for a later date, but he’s worried he will breach the savings limit for Pension Credit.
Jim asks: “As a recipient of Pension Credit (and recently Attendance Allowance) am I allowed to save my cost of living payments if they take over the savings limit for Pension Credit?
“Will those savings be regarded like all other savings?
GB News put the question to the Department for Work and Pensions (DWP).
They confirmed that the cost of living payments are tax-free and they do not have any impact on existing benefit awards.
Cost of living payments are intended to provide immediate financial pressures caused by rising prices.
An Age UK spokesperson replies: “For most low income older people these cost of living payments are much needed and are used quickly on meeting their high bills.”
The first £10,000 of savings or capital does not affect how much Pension Credit a person gets.
If a person has more than £10,000 in savings, every £500 over £10,000 counts as £1 income a week.
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For example, if a person has £11,000 in savings, this counts as £2 income a week.
However, the government has confirmed that cost of living payments would not impact existing benefit awards, such as Pension Credit.
People can check to see if they can claim Pension Credit online via the Pension Credit calculator.
To use the tool, they would need details of earnings, benefits and pensioners as well as savings and investments.
Those with a partner will need the same details for them. It's also possible to check by calling the Pension Credit claim line.
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