THE welfare state is going through its biggest change in a generation with the roll-out of the Welfare Reform Act.
How this is affecting working age benefits claimants has excited much debate, but very little has been said yet about its impact on older people. Indeed some commentators have enjoyed casting the situation as a generational conflict, in which struggling youth is pitted against unfairly privileged pensioners in a competition for society’s scarce resources. It’s time to debunk this myth that older people have never had it so good.
Some older people will be significantly affected by the Welfare Reform Act. Pension Credit is a benefit used to top up the State Pension so that, regardless of an individual’s or couple’s contributions history, their income doesn’t fall below a guaranteed minimum level. Yet low-income couples in which one person is older than State Pension Age and the other younger could lose out under the Act. Take the example of a man, aged 70, who currently receives more than £200 per week for himself and his partner, roughly half of which is the State Pension and the other half Pension Credit. Under new rules the couple would have needed to claim Universal Credit instead, which could reduce their income by around £100 per week. Such mixed-age couples could additionally be hit by the spare room subsidy, more commonly known as “the bedroom tax”.
People approaching State Pension Age with a disability should also heed the changes. Disability Living Allowance has been replaced by Personal Independence Payments for new claims, eligibility for which is assessed on a points-based system. As the budget for this is about a fifth less, it’s inevitable that there will be losers. People aged 65 or older at the time of this change and who are in receipt of Disability Living Allowance will not be affected. But claimants under-65 will be assessed for Personal Independence Payment instead over the next few years.
For older people unaffected by Welfare Reform the financial situation isn’t necessarily favourable. While pensioner poverty in Scotland has almost halved in the last decade, around one in four single pensioners and one in thirteen pensioner couples have no income other than the State Pension and other state benefits. And although the State Pension has in recent years been “triple locked”, meaning it is increased each year by the higher of earnings, prices or 2.5 per cent, it remains one of the lowest in Europe. Even after the introduction for a single-tier State Pension in 2016, which will only benefit people reaching State Pension Age after that date, it will lag significantly behind countries such as France, Germany and Sweden.
Pensioner incomes have been particularly vulnerable to inflation in recent years, as they spend proportionately more on food and eating. Older people on low incomes often bear the brunt of cuts in local services budgets. Across the country services such as meals on wheels and day care have in recent years been subject to steep increases in user charges, or a reduction in the quantity or quality of the service. Every council takes a different approach to charging, but overall the clear pattern is that those who are already vulnerable are getting less. Research shows that low income pensioners often do without “social items” such as transport, holidays and social activities. So unless there are affordable services that compensate; by allowing vulnerable older people to get out and about, enjoy company and take part in the life of their community, isolation and loneliness are likely consequences.
Of course later life is no longer synonymous with poverty, and for those older people who enjoy a high income perhaps life has indeed never been so good. But age can add an additional layer of disadvantage upon people who have borne inequality for a lifetime, and often tips the scales against those who have “got by” during their working life. As a society we need to ask whether the cumulative impact of cut-backs, inflation and welfare reform risks reversing progress we have made in tackling pensioner poverty.
• Doug Anthoney is Communication and Campaigns Officer, Age Scotland www.agescotland.org.uk