Adult Dependency Increase (ADI) – State Pension Top-Up to End in April 2020
As we enter 2020, significant changes are on the horizon for thousands of pensioners across the UK. From 6 April 2020, approximately 11,000 individuals are set to lose payments of up to £70 per week due to cuts in the Adult Dependency Increase (ADI) scheme. This alteration to the state pension system could have a substantial impact on many households’ finances.
What is the Adult Dependency Increase (ADI)?
The ADI is a supplementary payment added to the basic state pension. Its purpose has been to provide financial support for another adult who is financially dependent on the pension recipient, typically a partner who doesn’t receive their own state pension.
The ADI payments vary depending on the category of state pension received:
- £70 per week for those with category A old state pensions (based on national insurance contributions)
- £41.90 per week for those with category C old state pensions (for individuals aged 80 and over, not based on contributions)
The Upcoming Changes
While the ADI scheme was closed to new applicants in 2010, those already receiving the increase were allowed to continue claiming it. However, this is about to change. From 6 April 2020, all ADI payments will cease, regardless of when the recipient started claiming.
For those currently receiving the maximum payment, this could mean an annual reduction in income of £3,640 – a significant sum for many pensioners.
Who Will Be Affected?
According to data obtained from the Department for Work and Pensions through a Freedom of Information request by Royal London, over 11,000 pensioners are set to lose this payment. It’s crucial for those affected to understand the implications and explore alternative options.
What Can You Do If You’re Losing Your ADI?
If you’re among those set to lose your ADI payment, there are several steps you can take:
- Check Your Eligibility for Pension Credit: This benefit tops up your state pension if you meet certain criteria. There are two elements to pension credit:
- Guarantee credit: Tops up your weekly income if it’s less than £167.25 (or £255.25 for couples)
- Savings credit: An extra payment for those with savings towards retirement, worth up to £13.73 per week for singles or £15.35 for couples
- Consider Universal Credit: If you’re in a mixed-age couple (where one partner is below state pension age and the other is above), you may be eligible for Universal Credit instead of Pension Credit.
- Review Your Current Benefits: If you’re already receiving means-tested benefits such as Pension Credit or Universal Credit, these may increase to offset the loss of your ADI, potentially maintaining your overall income.
The Government’s Stance
The Department for Work and Pensions (DWP) has stated that the ending of ADI was part of a package of reforms introduced in 2010. These reforms were intended to allow more women to receive the full basic state pension and introduce more generous national insurance credits for carers.
A spokesperson for the DWP said, “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.”
Expert Opinion
Steve Webb, director of policy at Royal London, which uncovered this data, expressed concern about the impact of these changes: “It will come as a nasty shock to thousands of people to see their state pension cut by up to £70 per week. Losing over £3,500 per year overnight will make a material difference to the standard of living of those who are affected.”
What’s Next?
As we approach April, it’s crucial for those affected by these changes to take action. Review your financial situation, explore your eligibility for other benefits and consider seeking advice from organisations like Citizens Advice or Age UK if you’re unsure about your options.
While these changes may seem daunting, being proactive and informed can help mitigate their impact. Understanding your rights and the support available is key to navigating these pension alterations effectively.
Remember, the landscape of pensions and benefits is complex and ever-changing. Staying informed about all aspects of your pension can help ensure you’re receiving all the support you’re entitled to. As we move further into 2020, keeping abreast of these changes will be crucial for managing your finances effectively in retirement.
I did not know about this so your post has helped me a lot. I was so worried about this cut coming but I spoke to Citizen’s Advice Bureau who offered a lot of really great advice and now my husband and I are in a more stable financial position, thank goodness. It is very frightening being at the mercy of the government, I wish we had a private pension and income to cover us but they weren’t a thing when we were working.
The way the government keeps cutting benefits for needy people is really quite disgraceful. It doesn’t matter who is in power, Labour or Conservatives, they’re all as bad as each other and none of them is brave enough to make the changes we need to get this country back on its feet. They make cuts and just expect people to put up with it but I sense an uprising and I hope we as a people can get them to do better in the future.
My elderly parents rely on this payment to top up their income as they are very poor. I don’t know if they’ll be able to manage without it. The government is appalling, stopping money that old people desperately need.
Honestly so pissed off that the government stopped this payment. Like others, I have relatives who rely on this money so god knows what will happen to them once it gets taken away from them. We are not all rich like Tories ffs.