Pensioners miss out over refund

Pensioners miss out over refund

Four million pensioners will miss out on the £200 council tax giveaway promised in the budget - because they are already on means-tested benefits.

The Department of Work & Pensions confirmed to Jobs & Money that the council tax refund will not be paid to anyone claiming the minimum income guarantee (MIG).

Pensioners on the MIG, who number just under 4m, will be told to claim council tax benefit instead, which could be worth more than £200.

But critics argue that 1.8m million of those pensioners have so far failed to put in a claim for council tax benefit - partly because of the complexity of the means-tested forms. They may now lose out further by failing to be awarded the £200 refund.

The Liberal Democrats' pensions spokesman, Lord Oakeshott, says: "It is horribly ironic that the pensioners who can't hack their way through the Chancellor's means-testing jungle are also going to miss out on his election bribe."

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In a further twist in the benefits system, pensioners who are on the MIG but are over 70 years old will be paid a £50 council tax refund, and will still be able to claim council tax benefit on top. Pensioners over 70, who are not on the MIG, will not get the £50. They will be sent the £200 and can still put in a claim for council tax benefit.

A spokesman for Help the Aged said: "It is a ferociously complex system now."

The £200 council tax refund will be paid just before Christmas to pensioners over 65. It will arrive with the £200 winter fuel allowance (which rises to £300 when the pensioner reaches 80).

The detailed administration of the payment is still not clear, according to pensioner groups which were locked in discussion with the DWP after the budget announcement.

It is understood that pensioners will not have to fill in forms to obtain the new £200 council tax payment. But if a pensioner couple want to make a joint claim for the money, each individual will then receive half the amount each. Crucially, it will not appear as a refund or a deduction off the council tax bill currently arriving on doormats across the country.

Instead, the payment comes as a pre-Christmas bonus and it is up to the individual pensioner precisely how they allocate that money.

Council tax benefit can be claimed by pensioners whether they are on the MIG or not. Those who are already claiming benefits will automatically be sent a form this year. If you are on an income of up to £194 as a single pensioner or £278 as a couple, you will obtain some help towards your council tax bill.

Anyone over 60 who gets the guarantee credit element of the pension credit should qualify for a full council tax rebate.

If you have not received a claim form, contact your local council or download one from the Department of Work & Pensions website (www.dwp.gov.uk).

Guardian Unlimited © Guardian Newspapers Limited 2005