Pension Credit for Service Charges Max Limit

ExSpark

Hi
I'm thinking of purchasing a retirement flat on the south coast. At the moment I have enough to be able to pay the service charges and ground rent.
I'm thinking about setting up a small eBay business selling small items that can easily be handled and posted to supplement my savings in the hope that it will support me the rest of my life.
However, if I am unable to do that or can't continue it after a certain age and my savings have dropped down to a point that I can claim pension credit for the service charges (not the state pension as it is over the £218 limit) I need to know that it will pay the near full amount.
I used 3 benefits calculators and put in a service charge of £200pw just as a test amount. It came back with £191. Okay. Only £9 to pay with that.
I then tried to see what the limit was buy going up £100 3 times and each time it paid the full amount minus £9.
So I entered £1000 per week and it gave me £991. On all three calculators.
If this is correct I would never need to be concerned with how much the service charge was.
However, this does not seem real to me. Would they really pay out an unlimited amount? I thought there would be a limit of some sort. I can't find any information and even calling the official benefit help line they were unable to say. They said I would have to apply first and it would be dealt with then. It would be too late by then.
I realize that I'm looking at what's in place now with a view to what could happen 10 to 20 years down the line but I'm just trying to get an idea of the situation now. I don't see them changing it that much in the future. They wouldn't leave elderly people to go into debt and loose their home and end up on the street. After all, housing benefit has been paid for renters for years and that hasn't changed.
There is a cap on housing benefit but there is also a limit on savings of £16,000.
However, pension credit is different as there is no savings limit. It's just reduced £2 for every £1000 pounds savings.
So maybe there really is not limit?

Can anyone answer this. Does anyone have any experience with this situation?

Thanks

peteuk

My understanding is that pension credit tops up to a set amount, but if your over that amount then you cant claim pension credit. 

Pension Credit tops up:

• your weekly income to £218.15 if you’re single
• your joint weekly income to £332.95 if you have a partner

Once youve recieve pension credit then you can apply for other benefits, like housing benefit. 

Reduction for savings is correct, your reduction is £1 for every £500 over £10K, so yes £2 for every £1K.  So if your pension is £205 a week then PC will provide £13.15 to bring you up to the £2181.15.If your savings is £11K then they will reduce the £13.15 by £2.00, so with these fiqures you can have up to £16.5K (which will reduce the payment by £13.00)

If your state pension is over £218.15 then theres nothing to claim. 

Although thats me reading the gov webpage so I may be wrong.

Northern_Wanderer

https://www.gov.uk/government/publications/pension-credit-technical-guidance/a-detailed-guide-to-pension-credit-for-advisers-and-others might help.

HillStreetBlues

As you are getting a £9 reduction the pension you are entering will be about £227 (Based on you being single)
There is no max service charge but certain items are excluded. For example upkeep on communal areas are fine, but not heating for communal swimming pool.
With PC ground rent can be claimed.

Have you reached SPA yet? is so how much capital (savings) will you have after you buy (if you do)  how much is the current SC & GR and what's how much is your pension? This will give a rough idea if your about to claim PC.

ExSpark

I might not have explained properly. I am aware of the state pension issue. I receive the full amount of £226.78 so I would not claim PC for that.
It's only the service charge and ground rent that's the issue. I know that even though I wouldn't get it for topping up state pension I would still get it for that.
Also, there is no issue with savings as the situation will not exist at the moment because my savings, after I purchase, would be above the limit that I could claim PC.
I am thinking about the future as my savings start to dwindle. I know that this may not happen for years yet but I'm trying to get an idea of the situation with PC as it is now to get an idea about what's possible in the future.
I am aware that PC would only for service charge and ground rent is only paid of the essential part and not extras that are provided, like swimming pools etc. but I would avoid purchasing a retirement flat that has added amenities. I would look for the basics. Anyway, I would also be looking for a lower priced flat so will only have the basics.
My only question is, is there a limit to the amount of PC for service charges and ground rent that are charged for the essentials only?

ExSpark

Northern_Wanderer
Thanks but I've already downloaded the PDF version of that. It didn't answer my question.

8dayweek

I think you have to be eligible for Pension Credit in the first instance before you can then establish an “addition” for Housing Costs / Service Charges.

As in if you’re eligible for PC to top up your State Pension, THEN you could potentially get a further amount on top for Service Charges - but if you don’t qualify for PC to “top-up” your income then there’s nothing to add the Housing Costs / Service Charges to. 

If I’ve got that wrong I’m sure someone will correct me!

ExSpark

8dayweek
Thanks for your comment but that is not correct.
Firstly, I called the Pension Credit Claim Line and was told that you can claim it. It is not and addition. (Problem is they couldn't tell me if there was a limit).
Secondly, It would not make sense if it had to be an addition.
First scenario: You only get £210 pension. It is topped up by £8 and you can then claim, say, £100 for service charges.
Second scenario: You get £219 pension. Your not entitled to either.
So the person who gets £9 less gets £100 paid. Wouldn't make sense and would be totally unfair.

Northern_Wanderer

I'm not sure, but CPAG would know about this, I'm unsure if general public can ask them for advice, or if you'd have to go via CAB for an answer.

8dayweek

That’s how I understood that it works - means tested benefits aren’t usually based on your outgoings, they’re based on your income / savings / capital etc.

If you qualify on the grounds of your income etc then there’s potentially other elements or premiums you can claim on top based on your wider circumstances. 

This is where you get people talking about the “cliff edge” you get with certain benefits - someone getting PC would be passported to full Housing Benefit from the local Council if in rented accommodation but someone just over the threshold for PC would not necessarily qualify for any Housing Benefit at all (it would be wholly assessed on their total income, rather than “passported” by PC). 

ExSpark

8dayweek
Like I say, this was confirmed by the Government Pension Credit Claim Line themselves, the people you call to make a claim if you are having trouble claiming on line. I was told specifically by them that you can claim for service charges even if you don't get it for pension top up. It has also been confirmed by age UK and some other sources as well.
I'm afraid you're wrong about the housing benefit. I live in a block of flats at the moment and there are 3 other people on pensions who don't get PC and are all on housing benefit. If they didn't they would get £226 pension and have to pay £152 rent leaving them only £74. The cliff edge you are talking about is where you just about don't qualify for PC and therefore don't get the other benefits like the free NHS dental treatment and the recent winter fuel allowance of £300. (That's not fair on people due to the principle I stated above. However, this does not happen with service charges.)
Means tested benefit are based on your income & savings, yes, but that does not stop you from getting other benefits like housing benefit and council tax reduction. Housing benefit and council tax is a means tested benefit but is an outgoing. Just because PC is means tested doesn't mean that it's not based on your outgoings when it comes to service charges.
Like I said, I appreciate your input but what I have researched contradicts what you are saying.