Subject Predicate Object
1Crp2WFA
a
Resource
Answer
Written answer
answer has question
7tJY86hR
answer has answering person
Rosie Winterton
answer text
The formula for calculating the amount of notional income assumed from capital in pension credit, known as tariff income, is not intended to represent any rate of return that could be obtained from investing capital. It provides a simple method of calculating the weekly contribution that people with capital in excess of the level of the disregard are expected to make from their resources to help meet their normal living costs.In pension credit the first £6,000 of capital is fully disregarded (£10,000 for those in care homes). For each £500 (or part of £500) above this level we assume notional income at a rate of £1.The vast majority of pensioners who are eligible for pension credit have savings below the level of the disregard and do not have any tariff income applied.When income support was introduced in 1988 the rate of tariff income as set out in the legislation was £1 for every £250. With the introduction of pension credit we halved this rate to £1 for every £500, and also abolished the upper capital limit—giving more people access to support.Pension credit, through the savings credit, is designed to specifically reward pensioners with low or modest second pensions or savings. Notional income from capital is also qualifying income for the savings credit.As there is no link with actual market rates, the tariff income rates within the income related benefits are not adjusted when interest rates change.The tariff income levels are kept under continual review but they can only be increased when priorities and resources allow.
answer given date
answer has answering body
Department for Work and Pensions
written answer has answering body
Department for Work and Pensions
Department for Work and Pensions
answering body has written answer
1Crp2WFA
answering body has answer
1Crp2WFA
7tJY86hR
question has answer
1Crp2WFA
Rosie Winterton
answering person has answer
1Crp2WFA