My colleague has a client who was getting pension credit - saving credit only. She spotted that housing costs weren't included and got an increase to the saving credit (still not entitled to guarantee credit). However, 20% of this increase is lost in council tax benefit. Is this correct or am i missing something? It seems wrong somehow that housing costs should be lost, but the way I read it that is how it works.

When you say housing costs - I assume you referring to mortgage interest. If so, this is always paid direct to the lender and therefore would not be included in any Council tax calculation. Additionally housing costs would never be added to pension credit......?.

or did you mean that because their income has gone up, their CTB has gone down..... c'est la vie I'm afraid.

well i suspected that was the case but just wanted to double check - i don't deal with pensioners much so am not well up on PC and just seemed harsh that money you are paid for housing costs are taken back in CTB.

and out of curiousity mike surely this would still be the case even if it were mortgage interest paid direct to the lender?

sorry mike - didn't make myself very clear

the housing costs are actually service charges - when i said added to pension credit what i meant was that the housing costs were being included in the AMG and therefore increasing her savings credit - and they are being taken into account in the CTB calculation

You've checked that the LA are using the AIF?

I think it is correct that if she is still on Savings Credit only, then any £1 increase in this will lead to a £0.20 decrease in CTB. Housing costs won't increase her app amount for CTB.

Would be worth checking the LA has assessed the service charge correctly. In our experience they often make a number of deductions for assumed ineligible elements (often where the info about what the charge for is not clear). In a number of cases this has meant the difference between getting on to GC (and full CTB) or not.

This seems to be an anomaly in the system where the level of your service charge could determine whether you qualify for GC or not. This particularly affects people with more than £16,000 in savings who wouldn't qualify for any help unless they qualify for GC.

It is also our experience that a lot of people with these service charges (usually people living in owner-occupied, leasehold sheltered accommodation) are not getting these service charges paid with their PC, or have been incorrectly refused PC because they have not been taken into account. Some of this may be for historical reasons as there was a lot of misunderstanding and bad advice about these service charges when PC started in 2003. We have a number of customers who state categorically they were told these charges were not relevant to their claims when they claimed PC in the early days. Anyone with the time or the connections could probably dig up quite a bit of underclaiming by contacting pensioners in these schemes (you may work for such an organisation or perhaps your local Supporting People team has a list?).

thanks for that - very helpful

Sorry - meant check the Pension Service has assessed the service charge correctly! And stick in a claim for compensation if the person has been missing out for a while.