Benefits and LivingTogether

I was worried about losing my financial independence

"When Joe and I had been going out for a few months he started spending more and more time at my house. I’ve got two little girls and it is sometimes hard to get babysitters, so it was the obvious solution. When we’d been together for nearly a year Joe realised he was actually spending more time at my flat than he was in his own and he asked if he could move in full-time.

The weird thing was that, after we had decided it was what we wanted to do emotionally (I already considered us a family), we had to think about what it meant practically. Yes, he’d save money on his rent, but Joe’s a decorator and earns good money, so my benefits would go down. We realised that between us we would save a little money over-all, but I was worried about losing my financial independence.

When Joe moved in my Income Support stopped, but I still got Child Benefit and we started getting some Child Tax Credit. These were both paid to me so at least I felt like I had some of my own money."

Does not being married affect our benefits?
The good news
For most benefits, couples that live together are treated in exactly the same way as married couples.

If you live together, regardless of whether you are married or not, you must claim as a couple, you will receive the couple rate where there is one, and they will take both of your incomes and savings into account when working out if you are entitled to benefits.

Until recently this has only been true of male-female, but the law changed in 2005 and same-sex couples now have to make joint claims too.

The bad news
However, benefits based on National Insurance contributions do treat unmarried couples differently, and this means that you may lose out in some circumstances.

State pension

Currently, married women are entitled to a pension based on their husband’s National Insurance contributions. And husband’s and civil partners are now entitled to a pension based on their wife’s/partner’s contributions if they retired after April 2010. But this right isn’t available to couples that live together.

For most couples this isn’t a problem – if you claim a pension based on someone else’s contributions you only get 60% of the amount they receive - so most people would get a better state pension in their own right anyway. However, if one of you doesn’t work for many years it can become a problem.

If you are in this position, you should ensure that the non-worker will still have a good pension in their own name. Get regular pension forecasts to see how much state pension he/she would be entitled to. You should also consider setting up a personal pension in their name that the working partner pays into.

For more detailed advice and information about state and private pensions see our Pensions guide (426 KB).

Bereavement Allowance

If you live with your partner you also miss out on bereavement benefits when one of you dies. Bereavement Allowance or Widowed Parent’s Allowance, and the one-off Bereavement Payment can not be paid to unmarried bereaved partners, just husbands, wives and civil partners.

Unfortunately, there is no way to get around this - you might want to consider taking out a life insurance policy to help provide for your partner if you die.

Would I be better off married / in a civil partnership?
It is true that some couples might be better off if they were married or in a civil partnership. However, for many people it makes little or no difference when it comes to benefits. Whether you would be better off married or in a civil partnership depends on how good your state pensions are, and when you will retire, whether you’re on means-tested benefits, and something none of us can know – how old you and your partner will be when one of you dies.

If you are concerned about this issue, go to see an adviser – he or she will be able to work out what your position would be in both circumstances, so you can make an informed decision about what is best for you.

I’m moving in with my boyfriend – will I lose benefit?
You might do. If you are receiving means-tested benefits your boyfriend’s earnings and savings will be added to yours when they work out if you are entitled to benefit, and how much. You need to consider this possible financial loss (and the loss of your financial independence) before you move in with your partner.

Similarly, if each of you brings children from a previous relationship to the new family, only one child can count as the eldest for child benefit purposes. This is important because you receive an extra amount (£6.90 for 2010-11) for the eldest child.

If you are receiving Bereavement Allowance, your payments will stop when you move in with your boyfriend. If your relationship ends however, your claim can be re-instated. After the age of 60 for women (and 65 for men) you cannot receive Bereavement Allowance anyway, and will receive your pension instead.

There are also plans to stop paying child benefit to couples where one of them earns more than about £44,000 a year, so this may also affect you. However this isn’t expected to happen until 2013 - if it happens at all.

If you are unsure what effect moving in with your partner might have on your benefits see an adviser. They will be able to calculate if you would lose money, and how much.

My boyfriend’s benefits have been stopped because they say that I live with him. I spend a lot of time there but I live somewhere else. What counts as living together?
This is a common problem. Sometimes people will tell you that it counts as living together if you stay there for more than 2 or 3 nights a week – this is a myth. In order to be treated as a couple for benefits you have to be living together at the same address. If you have another address where you receive your post, keep your things, pay bills etc you clearly don’t live with your boyfriend. Other situations can be more difficult to prove to the Benefits Agency. If you have this problem you should go to an advice centre.

October 2010