Pensioners ‘miss out’ on £100 because of Christmas Bonus policy

Pension Credit: Yvonne on living on the breadline

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The Christmas Bonus is paid in December to people on the state pension or certain benefits. This year’s payment should already have been made and eligible people should look out for the DWP XB reference on their bank account.

However, if the Christmas bonus had kept pace with inflation, it would now be worth £108.63, according to the Bank of England’s inflation calculator.

The tax-free Christmas bonus is paid to people claiming one of a number of benefits and is usually paid in the first full week of December.

When the Christmas Bonus was first introduced in 1972, the weekly state pension amount was £6.75.

At the time, the £10 bonus would have gone a long way in buying gifts and other needs for the festivities.

With soaring prices for food and energy bills, the £10 payment will now barely cover the costs of a Christmas dinner.

Chancellor Jeremy Hunt announced in the Autumn Statement that many benefits and the state pension would increase by 10.1 percent, the September figure for inflation.

But there were no plans to announce an increase in the Christmas Bonus, which could provide vital support to hard-up Britons for the extra costs of the festive season.

A DWP spokesperson said: “We know that Christmas is a time that can stretch budgets which is why we offer those on certain benefits a £10 bonus and pay many people their benefits earlier than usual, helping them over the festive period.”

To be eligible for the bonus, recipients must be living or “ordinarily resident” in the UK, Channel Islands, Isle of Man and Gibraltar.

Those that receive at least one of the following benefits will be eligible for the Christmas bonus:

  • Armed Forces Independence Payment
  • Attendance Allowance
  • Carer’s Allowance
  • Constant Attendance Allowance (paid under Industrial Injuries or War Pensions schemes)
  • Contribution-based Employment and Support Allowance (once the main phase of the benefit is entered after the first 13 weeks of claim)
  • Disability Living Allowance
  • Incapacity Benefit at the long-term rate
  • Industrial Death Benefit (for widows or widowers)
  • Mobility Supplement
  • Pension Credit – the guarantee element
  • Personal Independence Payment (PIP)
  • State pension (including Graduated Retirement Benefit)
  • Severe Disablement Allowance (transitionally protected)
  • Unemployability Supplement or Allowance (paid under Industrial Injuries or War Pensions schemes)
  • War Disablement Pension at state pension age
  • War Widow’s Pension
  • Widowed Mother’s Allowance
  • Widowed Parent’s Allowance
  • Widow’s Pension.

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The money is paid automatically with no need for claimants to do anything to receive the funds in their bank account.

The bonus is paid into the same account in which a person usually receives their payments.

The 10.1 percent payment boost for the state pension means, from April 2023, people on the full new state pension will see their weekly payments increase from £185.15 a week to £203.85 a week.

Pensioners on the full basic state pension will also get a payment boost with their payments increasing from £141.85 a week to £156.20.

The new Universal Credit rates coming in next year will mean monthly payments will go up to:

  • Single under 25: £292.11
  • Single 25 or over: £368.74
  • Joint claimants both under 25: £458.51
  • Joint claimants, one or both 25 or over: £578.82.

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