State pension warning as thousands of older Britons £4k worse-off under DWP Universal Credit rule
Changes to Universal Credit are making pensioners worse-off
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Thousands of state pensioners are at risk of being £4,000 worse-off under a Universal Credit rule imposed by the Department for Work and Pensions (DWP).
Despite the cost of living crisis continuing be a factor for millions across the UK, an overhaul under the managed migration system means benefit claimants are losing a great deal of money.
Under current rules, households with one adult over and one under the state pension age are referred to as "mixed-age couples’ (MACs).
These couples are more likely to lose out than couples who are both than working-age due to a rule impacting Universal Credit.
An estimated 70 per cent of these households lose out by more than £4,000 per year under the benefits system, while around 96 per cent are believed to be poorer by £200.
According to the Institute of Fiscal Studies (IFS), under the legacy system these couples were entitled to apply for Pension Credit.
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Experts are warning pensioners could have 'less money' in retirementGETTYHowever, under Universal Credit, they must instead apply for the DWP's primary benefit.
As it stands, Pension Credit provides significantly more support than Universal Credit for claimants.
A couple with no other source of income coming in would be eligible to more than £17,300 per year in Pension Credit.
In comparison, that same couple would only get £7,400 annually if they were in receipt of Universal Credit payments.
Once fully rolled out, around eight million families will be claiming Universal Credit, which is the equivalent of around 29 per cent of all working-age households.
The means-tested benefit is replacing six "legacy" benefits with recent reform resulting in more people being placed on Universal Credit than Pension Credit.
Based on the IFS' "Universal credit: incomes, incentives and the remaining roll-out", households with over £16,000 of assets and the self-employed are missing out due to the current Universal Credit system.
The IFS is recommending integrating council tax support into Universal Credit would mean practically no workers facing a marginal tax rate above 75 per cent.Mubin Haq, Chief Executive of abrdn Financial Fairness Trust, said: "There are winners and losers from the introduction of Universal Credit.
"Those on the lowest incomes have benefited, with the bottom 40 per cent of households gaining on average.
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The DWP has estimated that it has underpaid between £300million and £1.5billion of State Pension due to admin errorsPA"Those in work, families with children and renters have seen improvements. But the self-employed and those with health-related problems tend to lose out.
"There’s still much to fix. Whilst there have been significant moves to rationalise work incentives and universal credit encourages people to move into part-time work, more can be done to support part-time workers into full-time work.
"Reducing the rate at which this benefit is reduced or increasing work allowances would make a real difference."
GB News has contacted the DWP for comment.
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