Pensioners may lose backdated cash

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From October 6, people applying for pension credit, housing benefit or council tax benefit will only be able to have their claims backdated for three months, rather than a year as is currently the case.

It is thought that around 100,000 of the UK's poorest pensioners could be affected by the changes, with people potentially losing out on up to £2,000.

The move is part of a shake up by the Government which aims to boost the number of people claiming means-tested benefits by making it easier to apply for them.

From October 6, people will be able to claim the pension credit, council tax benefit and housing benefit through a single phone call without having to fill in a form. The £100 million that the Government estimates it will save through limiting the backdated payments will be used to pay for this reform, with money also going towards increasing the pension credit and winter fuel payment.

The Department for Work and Pensions defended the move saying 70% of people claiming backdated benefits claimed them for three months or less.

But Government figures show that around 110,000 pensioners still claim arrears for more than three months, while 70,000 make backdated claims for the whole year.The average backdated claim in 2006/07 was for £700, but people could claim up to £2,000 in certain cases.

Pensions Minister Mike O'Brien said: "The change will not affect existing customers and new customers can still claim 12 months backdating if they apply before October 6. The changes are part of a wider package of measures to make claiming benefits simpler and more automatic and increase take-up."

Mervyn Kohler, special adviser at Help the Aged, said: "I think on balance this represents a good package. It is a trade off that is worth having."

But he added that the group was urging pensioners to submit claims for pension credit before October 6 so that they could benefit from the full 12 months backdating.