I’m disabled and previously worked and my wife receives Carer’s Allowance – should I still apply for state pension? Steve Webb replies
I’m disabled and receive Personal Independent Payment and Employment Support Allowance. My wife receives Carer’s Allowance.
My pension age will be next November when I am 66-years old. What should I do now? What will happen to me if I apply for a state pension?
Will all my benefits go away or not? What will be best for me? I worked between March 1993 to 2000 before I became sick. I would be very grateful for your advice.
What now? This week’s reader is worried how the state pension could affect their disability benefits
Steve Webb replies: The effect on your benefits of reaching pension age and drawing your state pension is different for different types of benefits.
We also need to think about your wife’s Carer’s Allowance. I should stress that I don’t have full details of your personal circumstances so what follows is a general description of the rules.
I will provide some links later on for where you can check your exact personal situation.
Starting with your Personal Independence Payment (PIP), the good news is that this will continue after you reach pension age, provided that you continue to satisfy the other conditions for the benefit.
Although brand new claims for PIP are generally not possible from those over pension age, those who first claimed before pension age can go on receiving PIP into retirement.
Steve Webb: Find out how to ask the former Pensions Minister a question about your retirement savings in the box below
Things are slightly more complicated with your Employment Support Allowance (ESA).
I’m guessing that you have been on ESA for a while and are receiving what is called ‘income-based’ ESA.
When you reach pension age, you are no longer able to claim ESA. But because you are part of a couple and it looks as though your wife is under pension age, you still come under the ‘working age’ benefits system.
This means that you would need to claim Universal Credit.
Once you start getting your state pension, every pound of state pension is deducted pound-for-pound from your Universal Credit.
Depending on the size of your state pension, it is possible that your income from state pension will be above the Universal Credit level and you would not be entitled.
However, because help with rent is now included within the Universal Credit system, if you live in rented accommodation you may still get help even if you have a significant state pension.
Things would change again once your wife reaches pension age.
First of all, your wife can claim her own state pension based on her own contributions.
However, assuming that her state pension is bigger than her Carer’s Allowance, then her Carer’s Allowance would unfortunately stop.
This is because of what are known as ‘overlapping benefit rules’ which apply when you would otherwise be entitled to two benefits at the same time, such as pension and Carer’s Allowance.
Second, if as a couple you are on a low income you could now see if you are entitled to Pension Credit to top up your income rather than Universal Credit.
Although your wife may no longer get Carer’s Allowance, she would have what is called an ‘underlying entitlement’ and this means a slightly higher rate of pension credit could be payable.
There are also additions for pension credit for ‘severe disability’, but in the case of a couple these generally apply only where both partners are receiving disability benefits in their own right.
As you can see, the rules are complex and depend on whether one or both of you is over pension age.
I would strongly advise you and your wife to get a state pension forecast so that you know how much you will be getting from that source.
You might also find it helpful to talk to a local welfare rights advice service such as Citizens Advice, or to check your position via a benefits calculator website.
The three calculator websites recommended by the Government are:
– Turn2Us (https://benefits-calculator.turn2us.org)
– Policy In Practice (https://www.betteroffcalculator.co.uk/#/free)
– EntitledTo (https://www.entitledto.co.uk/benefits-calculator).
Ask Steve Webb a pension question
Former Pensions Minister Steve Webb is This Is Money’s Agony Uncle.
He is ready to answer your questions, whether you are still saving, in the process of stopping work, or juggling your finances in retirement.
Steve left the Department of Work and Pensions after the May 2015 election. He is now a partner at actuary and consulting firm Lane Clark & Peacock.
If you would like to ask Steve a question about pensions, please email him at firstname.lastname@example.org.
Steve will do his best to reply to your message in a forthcoming column, but he won’t be able to answer everyone or correspond privately with readers. Nothing in his replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.
Please include a daytime contact number with your message – this will be kept confidential and not used for marketing purposes.
If Steve is unable to answer your question, you can also contact The Pensions Advisory Service, a Government-backed organisation which gives free help to the public. TPAS can be found here and its number is 0800 011 3797.
Steve receives many questions about state pension forecasts and COPE – the Contracted Out Pension Equivalent. If you are writing to Steve on this topic, he responds to a typical reader question here. It includes links to Steve’s several earlier columns about state pension forecasts and contracting out, which might be helpful.
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