Thousands of pensioners 'to lose out' in benefits back-payment rule change » Bill payments » 24dash.com

Thousands of pensioners could miss out on hundreds of pounds worth of backdated benefits as a result of rule changes that come into force later this year, it emerged today.

From October 6, people applying for pension credit, housing benefit or council tax benefit will only be able to have their claims backdated for three months, rather than a year as is currently the case.

It is thought that around 100,000 of the UK's poorest pensioners could be affected by the changes, with people potentially losing out on up to £2,000.

The move is part of a shake up by the Government which aims to boost the number of people claiming means-tested benefits by making it easier for people to apply for them.

From October 6, people will be able to claim the pension credit, council tax benefit and housing benefit through a single phone call without having to fill in a form.

The £100 million that the Government estimates it will save through limiting the backdated payments will be used to pay for this reform, with money also going towards increasing the pension credit and winter fuel payment.

The Department for Work and Pensions defended the move saying 70% of people claiming backdated benefits claimed them for three months or less.

But Government figures show that around 110,000 pensioners still claim arrears for more than three months, while 70,000 make backdated claims for the whole year.

The average backdated claim in 2006/07 was for £700, but people could claim up to £2,000 in certain cases.

Pensions Minister Mike O'Brien said: "Many pensioners are still not claiming benefits they may be entitled to. That's why we are making every effort to urge pensioners who may be eligible to claim and making the process as easy as possible.

"The change will not affect existing customers and new customers can still claim 12 months backdating if they apply before October 6.

"The changes are part of a wider package of measures to make claiming benefits simpler and more automatic and increase take-up."

Mervyn Kohler, special adviser at Help the Aged, said: "I think on balance this represents a good package. It is a trade off that is worth having."

He said if people lost a £1,000 windfall through not having the pension credit backdated for a year, they were likely to gain around the same amount through automatically receiving council tax benefit.

But he added that the group was urging pensioners to submit claims for pension credit before October 6 so that they could benefit from the full 12 months backdating.

Liberal Democrat Work and Pensions spokesman John Barrett said: "With these changes, the Government is giving with one hand and taking away with the other.

"I cannot see any justification for the change in the backdating rules other than to save money for the Exchequer.

"The simple reality is that some of the most vulnerable pensioners will be missing out on hundreds, perhaps thousands, of pounds as a result.

"The Government should be focusing on increasing the benefits take-up rate rather than penalising pensioners who were either unaware of the help that is available, or unsure of how to apply."