Mixed-age pensioners could be around £7,000 a year worse off due to changes, dubbed the ‘toy boy tax’, announced by the government in the midst of Brexit negotiations.
That’s according to Age UK, which warned the government’s announcement that from May 15th 2019 ‘mixed age couples’ – where one partner is of working age and the other is above State Pension age – will no longer be entitled to put in a new claim for Pension Credit, could penalise couples.
The charity is warning that the government’s policy change effectively means that many pensioners might find themselves in the position of being financially better off if they split up and live apart from their partner.
This is because once the change is implemented, the pensioner partner will, in many cases, actually be eligible for more money from their Pension Credit than they and their partner will get together from Universal Credit.
Commenting on the announcement, Caroline Abrahams, charity director at Age UK, said: “You could be forgiven for missing this announcement, since the government used the most low key mechanism possible, a Written Ministerial Statement, late afternoon on the day before the ‘meaningful vote’, to bury the bad news.
“And make no mistake, this is very bad news for everyone affected. It’s a substantial stealth cut – a couple claiming in the future could receive £140 less per week than an older mixed couple claiming before the change comes in.”
Age UK is warning that although in theory this change will not impact on existing claimants – only new ones – if a mixed age couple temporarily loses their eligibility for Pension Credit then from May 15th they will be unable to regain it and will be put onto the Universal Credit regime.
Abrahams added: “Last week the new Secretary of State at the DWP, the Rt Hon Amber Rudd MP, made a speech about the future of Universal Credit that was widely praised as thoughtful and compassionate.
“We are very disappointed that only a few days later, her Department has quietly announced a measure which will hit the older couples affected very hard, undoubtedly pushing more into poverty.
“It is by no means unusual for one partner to be slightly older than the other within relationships and the bigger the age gap between them, the more long-lasting the adverse impact on them will be because of this proposed change.
“That’s why this government policy has been dubbed ‘the toy boy tax’ by some – but that’s not to trivialise the really serious impact it is likely to have on anyone unlucky enough to be subjected to it. For some, the impact will be truly devastating. The government should think again.”