A new scheme from the Department for Work and Pensions (DWP) will merge two major benefits, impacting millions of claimants. This follows Labour’s commitment to simplify benefit payments by streamlining complex eligibility rules.

The new regulations aim to provide a more straightforward support system for those claiming both Housing Benefit and Pension Credit. Initially introduced by the Tory government in 2011 but delayed significantly, the scheme will now offer a single benefit to those over 66, potentially increasing their income.

The DWP has inked a nearly £1 million deal with tech behemoth IBM to consult on the digital transition. IBM’s online customer experience experts will assist in designing the new system under the four-month contract.

The DWP also stated it would “work with Local Authorities to bring together the administration of Pension Credit and Housing Benefit as soon as operationally possible.”

While Universal Credit has superseded Housing Benefit for many, pensioners remain one of the few groups eligible to apply separately. Most now receive support through the comprehensive Universal Credit system.

It is estimated that around 760,000 pensioners who could qualify for Pension Credit are currently not claiming it, missing out on an average of £3,900 extra each year.

Moreover, Pension Credit could also qualify a claimant for this year’s Winter Fuel Payment. The eligibility criteria for this has been significantly reduced, meaning only those claiming certain benefits can receive it.

Work is anticipated to commence soon on the transition of Pension Credit and Housing Benefit into a unified system, but this isn’t expected to be operational until 2026.

Who qualifies for Pension Credit?

Pension Credit comes in two forms: Guarantee Credit and Savings Credit. To be eligible for Guarantee Pension Credit, you must have reached State Pension age (currently 66).

Your weekly income should be less than the minimum amount the UK Government considers necessary for living. This minimum is set at £218.15 for single individuals and £332.95 for couples.

These amounts may be higher if you’re disabled, a carer, or have certain housing costs.

Savings Credit is only available under specific conditions: you reached State Pension age before April 6, 2016, or you have a partner who reached State Pension age before this date and was already receiving it. You have qualifying income of at least £189.80 a week for a single person and £301.22 a week for a couple.

How much could you potentially receive?

Guarantee Credit tops up your weekly income to a certain level. You might be eligible for more if you’re disabled, a carer, or have certain housing costs.

The amount you can receive from Savings Credit is dependent on your income and savings. It’s important to note that any income from savings and capital over £10,000 will be considered.