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Thousands brace for big cut to state pension

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Written by: Paloma Kubiak
04/01/2020
Around 11,000 retirees are set to lose a combined £33m in state pension benefits in April following a rule change on claiming money for adult dependents.

The Adult Dependency Increase (ADI) allows a retiree to claim a payment for a partner who is financially dependent on them. This tended to be aimed at male retirees who provided financially for an unwaged wife.

It typically boosts the state pension by up to £70 a week but the ADI was stopped for new claimants in April 2010 and from 6 April 2020, it will be abolished for existing recipients.

The figures were obtained by mutual insurer, Royal London, and Steve Webb, director of policy, said: “Under the old state pension system, people claiming a retirement pension could get a significant extra amount for a spouse who was financially dependent upon them.  Although that addition was abolished for new claims in 2010, many people already in the system have continued to benefit.

“It will come as a nasty shock to thousands of people to see their state pension cut by up to £70 per week. It seems penny-pinching of the government to take this money away when the addition is gradually working its way out of the system in any case. Losing over £3,500 per year over night will make a material difference to the standard of living of those who are affected.”

Options from April

The Department for Work and Pensions (DWP), said when these payments stop, applicants may be eligible to apply for Pension Credit or Universal Credit.

A spokesperson, said: “The ending of ADIs was part of a package of reforms introduced in 2010, which meant that overall more women received the full basic State Pension and more generous National Insurance credits for carers were introduced.

“After 6 April 2020, current ADI recipients may be eligible for a means tested benefit such as Universal Credit or Pension Credit. Those already in receipt of a means tested benefit should see no change to their income as the loss of the ADI will be offset by an increase in their means tested benefit.”

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