Thousands of pensioners could get money off their Council Tax – can you?

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GB News: Expert discusses potential rise in Council Tax

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Following reports of a potential increase in the cost of Council Tax, which would mean the average person needing to find an additional £500, pensioners may want to look into whether they are eligible to claim Pension Credit and reduce their Council Tax bill. The tax increase is expected to be used to help fund the Government’s new social care plans.

It is believed that an extra £8billon is needed to pay for social care services, as well as child protection, waste and recycling and road maintenance, and this could mean Council Tax soaring in the coming years.

British taxpayers could face a financial squeeze as a result, as they are asked to find an average of an additional £500 a year, for Council Tax.

The Local Government Association (LGA) has said councils need a 25 percent rise in public funds in order to pay for social services due to an ageing population – and this brings up the question of how this will be paid.

Prime Minister Boris Johnson announced social care reforms last month which are designed to reduce the cost of care and ensure people are not hit with huge bills when they retire, which is to be partially funded by a 1.25 percent increase in National Insurance.

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As part of the hike, people who have continued to work past state pension age, who did not previously have to pay NI, will have to fork out to help fund the new social care plan.

However, pensioners may be able to claw some of their money back by claiming Pension Credit and reducing the cost of Council Tax in the process.

Pension Credit is a benefit for people who are over state pension age who are on lower incomes. It helps to supplement the income of eligible retirees. It has two elements; Guarantee Credit and Savings Credit, with each element providing a different level of additional weekly income to those who need a boost.

Guarantee Credit brings claimants weekly income up to a guaranteed level of £177.10 for single pensioners, who would receive therefore pick up £9,209.20 per year.

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Married pensioners (or those in a civil partnership) would see their weekly income topped up to £270.30 per week, which would mean they could get £14,055.60 each year.

Savings Credit on the other hand provides extra income for people who have made some provision towards their retirement through savings or a pension other than the basic state pension. For single pensioners, the additional income afforded by Savings Credit can be up to a maximum of £14.04 a week.

This would mean claimants can pick up an extra £56.16 each month, or £730.08 per year. People who are married or in a civil partnership could pick up an extra £15.71 each week, which would mean £816.92 more per year for the 2021/22 tax year.

People who receive the Guarantee Credit element of Pension Credit could get their Council Tax paid in full. However, people who do not get Guarantee Credit but who are on a low income and have less than £16,000 in savings could still get some relief.

Pensioners still need to pay Council Tax, but may get some help if they live alone, or are entitled to Council Tax Support.

People can make their claim for Pension Credit up to four months before they want to start receiving the benefit and therefore avoid waiting for their first payment.

Claims can be made any time after someone reaches state pension age, but they can only be backdated for a maximum of three months. This means claimants could receive up to three months’ worth of Pension Credit in their first payment.

However, not everyone will be eligible for Pension Credit, as some conditions must be met. For example, only those who reached state pension age before April 6, 2016 qualify to claim the Savings Credit part of Pension Credit, whereas people who reached state pension age on or after April 6, 2016 can only get the Guarantee Credit part of Pension Credit.

Even if someone finds out that they are only able to receive to a small amount of Pension Credit, it may be worth claiming as this could help them qualify for other benefits, as well the obvious benefit of providing extra income.

In some cases, it may even be possible to receive a higher level of Pension Credit, as people who are disabled, have caring responsibilities or are responsible for paying certain housing costs, such as mortgage interest payments, may be eligible to receive even more income.

Even though one must have reached state retirement age to be able to claim Pension Credit, it can be received regardless of whether the claimant has actually retired or not, meaning even people who have decided to work past retirement age can apply.

The amount of Pension Credit that can be received depends on the pension pots that a claimant already has, which will be assessed during one’s application. Other assets such as savings and investments could also count towards the benefit assessment.

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