Commentary on Sections Schedule 4: Housing credit element of state pension credit
159.State pension credit is currently made up of two elements: the guarantee credit and the savings credit. Schedule 4 amends SPCA 2002 to create a new credit to cover housing costs. This will provide support for people who have reached the qualifying age for state pension credit (for couples where both members have reached the qualifying age) once housing benefit is no longer available following the introduction of universal credit.
160.Paragraph 2 and 3 of Schedule 4 amend SPCA 2002 to provide that a person is entitled to state pension credit if, in addition to being in Great Britain and having attained the qualifying age, that person satisfies the conditions for entitlement to the new housing credit element. A person may be eligible for the housing credit without being entitled to either of the other elements of state pension credit, or may receive more than one element if they meet the relevant conditions.
161.Paragraph 4 inserts a new section 3A into SPCA 2002. Section 3A sets out the conditions of entitlement to the housing credit and provides the powers to set out the structure of the housing credit in regulations. Subsections (1) and (2) of section 3A outline the specific conditions which a claimant must meet along with basic conditions which need to be satisfied in order to be entitled to the housing credit. Subsection (1) provides that, as with housing benefit, a claimant must be liable to make payments in respect of the accommodation they occupy as their home. Subsection (2) provides that a claimant will not be entitled to housing credit if the amount payable is below a certain level, to be prescribed in regulations, once the claimant’s income and capital has been taken into account. This calculation will be specific to the housing credit and will not be the same as the income rules for the other elements of state pension credit.
162.Subsection (3) of the new section allows the Secretary of State to prescribe in regulations the method by which the rate of the housing credit will be determined or calculated. The amount may be zero to allow entitlement to be restricted in specific circumstances outside of the core entitlement conditions. The intention is that claimants will be entitled to broadly the same amount of support under the housing credit as they would have been entitled to by way of housing benefit.
163.Subsections (4) and (5) of the new section specify types of accommodation in respect of which a housing credit may be claimed and allow the Secretary of State to make provision through regulations to determine when a claimant is treated as liable or not liable for payments in respect of the accommodation. Subsection (6) enables different provision to be made for different areas.
164.Assessed income periods in state pension credit are set periods in which changes to retirement provision, such as income from retirement pensions, annuities or capital, do not need to be reported, thereby fixing the amount of retirement provision. Provision in respect of fixing a claimant’s retirement provision is provided by section 7 of SPCA 2002. Paragraph 5 of the Schedule amends section 7 so as to give the Secretary of State the power to prescribe in regulations circumstances in which retirement provision will not be fixed for the purpose of determining entitlement to the housing credit.
165.Paragraph 6 amends section 12 of SPCA 2002 to enable regulations to modify provisions relating to the housing credit where a claim is made by members of a polygamous marriage. Paragraph 7 inserts a definition of housing credit into the interpretation section of SPCA 2002.
166.Part 2 of the Schedule makes consequential amendments to other legislation as a result of the replacement of housing benefit with the housing credit.