Sunday, 16 June 2019

FREE TV LICENCES

From 1 June 2020 the BBC has decided to restrict free TV licences to people aged 75 or more who also get a means-tested benefit called Pension Credit. Here is what you must do.


An estimated 4.6 million people over the age of 75 currently get a free TV licence. 
  • Nearly 950,000 over 75s got Pension Credit in November 2018. There are two parts to Pension Credit called 'guarantee credit' and 'savings credit'. Either qualifies for a free TV Licence. To continue to get a free licence from 1 June 2020 they will need to contact TV Licensing with proof of their entitlement. The details of when and how that is to be done have not been announced.
The rest fall into two groups. 
  • About 650,000 over 75s could get Pension Credit but do not. If they claim it before 1 June 2020 they can contact TV Licensing and their free licence will continue. If they leave the claim until after that date it will be restored. 
  • All free licences will expire on 31 May 2020. Anyone who does not get Pension Credit will have to pay from 1 June 2020. There will be more than three million people in this position. Some will not have paid for a TV Licence since the scheme began in 2000. They will all be written to by TV Licensing. There will be easy payment methods but those have not yet been announced. 
People who live with others
The free TV Licence is currently available to any household where at least one person aged 75 or more lives. So it can be claimed by younger people if a person over 75 lives with them.

From 1 June 2020 the free Licence will be available to any household where someone aged 75 who is on Pension Credit lives. The household itself will not be means-tested. So younger people will benefit from the free licence in those circumstances.

People born before 1 June 1945 
People born before 1 June 1945 who are currently 74 can still all claim a free TV licence from their 75th birthday which will last until 31 May 2020. Contact TV Licensing. You can call on 0300 790 0368.

Who can get Pension Credit

Age
Pension Credit can only be claimed by people over state pension age - currently just over 65. If they live with someone else as a couple then to claim Pension Credit in future both must be over state pension age (there are exceptions - see Couples below). If they get Pension Credit the free TV licence is given if either of them is over age 75.

Income
If you are over 75 and your income is up to £201.53 a week then you can get Pension Credit. If you live as part of a couple then your income is counted jointly and the upper limit is £293.61 a week. 

If you get Carer's Allowance you can add £36.85 to these amounts. You can count as a carer even if you do not get carer's allowance if you would be entitled to it. See 'Carers' below.

If you are severely disabled add £65.85. 'Severely disabled' normally means means you get Attendance Allowance. See 'Severely disabled' below.

If you are part of a couple the rules for adding these amounts are complex but you should still apply.

Savings
If you have savings or investments of up to £10,000 they do not affect your entitlement to Pension Credit. If they are more than £10,000 then an amount is added to your income. That amount is £1 a week for every extra £500 of savings. So savings of £15,000 mean that £10 a week is added to your income. Of course, savings of £500 will not produce an income of £1 a week. You will be lucky if you get 15p a week. But that is how the rules work. Any income the savings actually produce is ignored. For a couple, savings are added together and the limits apply to their joint savings.

There is no upper limit for savings that disqualifies you from getting Pension Credit. Some people with low incomes and tens of thousands of pounds in savings can still get Pension Credit. But if savings are very high then your entitlement to Pension Credit will be wiped out. 

Just claim!
If your head is hurting with all these complex rules (mine often is!) then just claim. You can do that easily by calling 0800 99 1234. The call will be free. Have all your details of income and state pension with you and if possible your NI number. They will tell you if you do not qualify.

Check your entitlement
You can find out how much Pension Credit you could get using one of the online calculators. All are anonymous. The average amount of unclaimed Pension Credit is around £2500 a year. So it is well worth claiming regardless of getting a free TV Licence. Even if your entitlement is just 1p a week you will still get the free TV Licence.

By far the best online calculator is from an organisation called Entitled To. It will also work out if you can get any reduction in your council tax if you are a homeowner and, if you are a tenant, your rent as well. It also suggests other places you might be able to get financial or other help. Homeowners can claim Pension Credit.

If your income is below £167.25 a week (£255.25 for a couple) then you will get some guarantee credit. If you do then your council tax will be reduced to zero. If your income is higher than that and you get only the savings credit then your council tax will normally be substantially reduced UNLESS your savings are over £16,000. In that case you will not get a council tax reduction at all. But that extra savings rule does NOT apply if you get any guarantee credit.

If you prefer the official calculator on the Government website be aware it is very long and fiddly - although you can ignore most of the boxes - and if you need to change something after you get the answer you have to start again. It does not work out entitlement to other benefits like council tax reduction or help with rent.

Another online calculator is run by the charity Turn2Us. It is a bit fiddly too but the charity also has an online search for grants and other cash help you may get. So it is worth using for that.

Fiddly Bits

Extra information about some of the complex rules that surround Pension Credit

Younger people
There is some confusion about income limits for Pension Credit. That is because it is in two parts - guarantee credit and savings credit. Guarantee credit will raise your income to £167.25 a week (£255.25 for a couple). But if your income is higher than £144.38 a week (£229.67 couple) then you are also given an extra bit of pension credit called 'savings credit'. Entitlement to that runs out as your income exceeds £201.53 a week (£293.61 for a couple) though you will not see those two figures in any official publication.

The savings credit is not paid to people who reached state pension age from 6 April 2016. They are men born from 6 April 1951 and women born from 6 April 1953. At the moment they cannot get free TV licences as they are under age 75. When they can in 2026 and 2028 there will be discrimination between men and women and the scheme may have to change. See also 'Younger People' below.

Couples
A new rule for couples began on 15 May 2019. From that date they can only get Pension Credit if they are BOTH over state pension age. Before that date they could claim Pension Credit if EITHER of them had reached state pension age. So a man of 76 with a partner aged 64 will not now be entitled to get Pension Credit. However, there are two important exceptions.
  1. No-one will have their pension credit taken away. So if you are a mixed age couple (as the DWP calls them) and you already got Pension Credit or Housing Benefit before 15 May 2019 you will still qualify for Pension Credit.
  2. If you successfully claim Pension Credit by 13 August 2019 it will be backdated up to three months which means you were entitled to it before the new rule began. So if you are claiming now and were a couple who would have qualified before 15 May 2019 you will still be able to get Pension Credit. You must claim by 13 August 2019.
The DWP does not care if a couple is married, civil partnered, or neither. If they live together as a couple then they count as a couple.

Carers
You qualify for Carer's Allowance if you spend at least 35 hours a week caring for someone else who is severely disabled. That normally means they get 
  • Attendance Allowance, or
  • One of the two higher rates of Disabled Living Allowance (DLA) or, 
  • Either rate of Personal Independence Payment (PIP). 
If you are over state pension age you may not have claimed Carer's Allowance as it will not be paid on top of your state pension. But it is important to claim it as it will entitle you to more Pension Credit. 

Severely Disabled
For people over 75, severely disabled normally means you get 
  • Attendance Allowance, or
  • Constant Attendance Allowance paid to ex-service personnel
Numbers
DWP statistics for November 2018 show that 943,954 people aged 75 or more get Pension Credit.
DWP take up figures for 2016/17 - published in November 2018 - show that 650,000 over 75s who could claim Pension Credit do not do so which is a take-up rate of 59%. The average amount unclaimed by them is £48 a week or £2496 a year.

Why the BBC changed the rules

Origins
The free TV Licence for people over 75 was introduced by Gordon Brown when he was Chancellor of the Exchequer. It was announced in the pre-Budget Report on 9 November 1999 and confirmed in the Budget on 21 March 2000. It began on 1 November 2000, a few months before the June 2001 election which Labour won comfortably. The cost - around £350 million a year then - was paid by the DWP and it has continued to pay the BBC for the cost of the free licences. So the free Licenses did not cost the BBC anything.

People now aged 94 and younger will not have paid for a TV licence since they reached 75, for nearly 20 years in some cases. 

Change
As part of the renewal of the BBC Charter in 2015 the Government insisted that the BBC bear the whole cost of the free licences from April 2020. The BBC estimates the cost at £745 million in 2021/22 rising to £1 billion a year by 2030. The cost is around 15% of its current £5 billion a year budget and is more than the total cost of all its radio stations and almost as much as all its TV stations apart from BBC One. The BBC says it cannot afford to pay that it without major cuts affecting programmes enjoyed by all licence fee payers. The cost of the means-tested Free Licence scheme will cost the BBC an estimated £250 million a year.

As part of the Charter deal the BBC was allowed to raise the licence fee by inflation from April 2017. It had been frozen since 2010 as part of the previous Charter deal when the BBC had refused to take over the cost of free TV Licences. It rose from April 2017 and in April 2019 it went up by £4 to £154.50. There are around 26 million licences so the rise brought in just over £100 million this year. 

Which over 75s will the BBC free licence exclude from 1 June 2020?
  • People over 75 who get pension credit but who do not claim the free TV licence.
  • Anyone aged 75 or more on an income low enough to claim pension credit but who does not claim Pension Credit. They may have very low incomes - on average the income of non-claimers is around £120 a week.
  • Couples where one partner is below state pension age even if their income as a couple is very low. They can no longer claim Pension Credit for the first time, though many will continue to get it and of course be eligible for a free TV Licence. See 'Couples' above. 
  • People with low incomes just above the limit to get Pensions Credit for example an income as low as £202 a week for a single person or £294 a week for a couple. They will have to pay in full for the Licence. Currently it is £154.50 but from April 2020 it is expected to rise with inflation to around £158. It will cost up to 1.5% of their income. 
People outside the UK
The change in the rules applies throughout the UK. People living in the Channel Islands and the Isle of Man - which are not in the UK - also pay for a TV Licence and get a free one if they are aged over 75. It is not clear yet how their entitlement will change.

TV Licence
Version 1.10
24 June 2019