Will my pension affect my benefit entitlement?

Last updated: Aug 1st, 2013
Ask The Experts

Question

I am almost 65. My monthly income is currently supported by a £294.40 Disability Living Allowance (DLA) and £452.92 Incapacity Benefit.

I also have a car supplied by Motability, which is replaced every three years with no cost to myself.

What will happen to these benefits when I reach 65 and start receiving the state pension?

Will I be worse off financially? And what will happen to my Motability car?

GB, Chichester

Answer

When you turn 65 your Incapacity Benefit will stop, as you then become entitled to claim your state pension.

You may also be entitled to an amount of additional state pension, based on extra NI contributions you may have paid under the State Earnings-Related Pension Scheme (SERPS) or State Second Pension Scheme.

You can claim your pension up to four months before your 65th birthday, but you can ask The Pension Service for a pension forecast (0845 300 01680) at any time before then, which can tell you how much your weekly pension will eventually be.

When you are 65 you will become entitled to a larger personal income allowance before you have to start paying income tax. This means you will pay less tax on income such as your pension.

You should have received a P161 form from HM Revenue & Customs (HMRC) so it can confirm your entitlement to the age-related allowance. If you have not received this form, call HMRC to request one on 0845 300 0627.

DLA can only be claimed by people under 65, but as you have already been awarded it you can continue to receive it after your 65th birthday. So your DLA won’t change just because you turn 65.

When your current agreement with Motability runs out, you can make an application for another three years, as long as you are entitled to the DLA mobility component at the highest rate.

Your Comments

Dave4,
I am 60 years old this year. I receive Disability and Income support. This year i have started to receive a small work pension from a job i had between 1972-1984. Will this affect my benefits?
 
 

I am 55 and wish to take my pension early.I presently receive £338.20 per fortnight employment support ( Suppot group) and D.L.A ( low rate care and high rate mobility).I also receive housing benefit and coucil tax allowace.
If I take my pension I will receive £17,000 cash,which I wish to use to clear debts and buy a decent car.I will also receive £204 per month pension.
How will this affect the benefits please ?
Thank you. 
tj14

I have a similar problem:-
I am a 63yr old male and qualify for ESA at the Support Level.
However a few months ago I was asked to call in and take my private pension details with me ( I receive a small local government pension after finishing work with ill health ).
My entitlement was then immediately reduced, from about £200 per fortnight, to £49 per fortnight. 
I thought that ESA at Support Level was based on contributions only, and not means tested.
Could you please clarify?
Thanks in Advance
MH
 

The Age related Personal Allowance is not available to those born after 6th April 1948 so you should ammend your article (see H.M.R.C Website)