DWP close Universal Credit loophole – handing 200,000 pensioners £350 each

Tory benefit chiefs have closed a Universal Credit loophole after campaigners warned it could leave pensioners without cash for up to nine weeks.

From now on, people on the six-in-one benefit will be given a guaranteed one-off payment – averaging £350 a head – when they hit state pension age and have to leave UC.

The £70m policy is expected to guarantee cash for 200,000 Universal Credit claimants who hit state pension age in the next five years.

It is a victory for a campaign backed by 74 MPs from Labour , Lib Dem, SNP , Plaid Cymru, the Greens and DUP after a gap in the law was spotted by a local Citizens Advice office in Flintshire.

The Citizens Advice staff said pensioners were risking being left without money for a long period, due to the way Universal Credit and the New State Pension are each paid.

Some claimants saw their UC payment end weeks before they hit state pension age, if they didn't file a claim for Pension Credit.

Yet they then also had to wait up to five weeks for their pension to be paid, according to researchers for Alyn and Deeside MP Mark Tami who raised the problem.

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Today Work and Pensions Secretary Therese Coffey insisted the DWP had already been filling the gap using discretionary powers.

But she confirmed a new law will guarantee that all pensioners receive the right amount no matter what.

She explained that pensioners will now receive payment for the entire Universal Credit "assessment period" in which they hit the pension age.

Previously, the law said they only had to be paid only up to the date they hit the pension age, or the end of the previous month-long assessment period, Mr Tami's office said.

Mr Tami told the Mirror: "I'm obviously delighted that the government has listened and I obviously welcome the changes to what was a very unfair system.

"The government couldn't really defend the existing position."

Mr Tami praised the Department for Work and Pensions (DWP) for acting swiftly to solve the problem just weeks after he raised it in an Early Day Motion – a device that usually has little impact.

Despite the DWP insisting it had already been covering the gap, he added: "There does remain an issue with people who have suffered a loss already as a result of the provision.

"I would like to see some compensation for them. I know these things are not easy and it's not just a case of pressing a button, but this should be corrected."

DWP chief Therese Coffey said the process of giving pensioners an extra payment was already in operation voluntarily, outside the law. Legislation will then be amended later this year.

She said: "This top-up will ensure pensioners aren’t left in limbo when they’re waiting to get their State Pension, with an average boost of £350.

“Since 2010 around 100,000 pensioners have moved out of poverty, thanks to policies such as the triple lock.”

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