Is the State Pension Christmas Bonus taxable? No: it is a tax-free £10 paid before Christmas to people getting the State Pension or certain benefits.
If the bonus has you wondering when to start your State Pension, ask for a call on this page's form; claiming now versus deferring is a choice an FCA-authorised adviser can then compare with you at no cost.
Is the State Pension Christmas Bonus taxable?
No. GOV.UK describes it as a one-off tax-free £10 payment made before Christmas, paid to people who get certain benefits in the qualifying week.
Because the payment is tax-free, it does not add to the income that your Personal Allowance is measured against. What the pension itself is taxed on is a separate question, answered in is the State Pension taxable.
How much is the Christmas Bonus, and what is it?
The Department for Work and Pensions (DWP) says the Christmas Bonus is a one-off payment of £10.
It is a single payment for the year, not an addition to your weekly State Pension, so it never shows up in the figures on the State Pension rate page. It also leaves your other benefits untouched: DWP says It will not affect any other benefits you get.
If you ever receive more than one bonus, contact the Jobcentre Plus office that deals with your payments, or the Pension Service.
Who gets the Christmas Bonus?
Two conditions apply, and you need both. First, you must live in, or be physically in, the UK, Channel Islands, Isle of Man or Gibraltar during the qualifying week. Second, you must be getting at least one of a list of benefits in that week, which is normally the first full week of December.
The State Pension (including Graduated Retirement Benefit) is on the list, so most people who have claimed theirs are covered. Other entries include Attendance Allowance, Personal Independence Payment, Carer's Allowance and the guarantee element of Pension Credit. The list also names Disability Living Allowance, war pensions and several widows' benefits; the full list is on GOV.UK's Christmas Bonus eligibility page.
One sentence there matters to anyone planning when to start their pension: If you have not claimed your State Pension and are not entitled to one of the other qualifying benefits you will not get a Christmas Bonus.
Anyone weighing a delay should read whether deferring is worth it with that in mind. Pension Credit is covered in who gets Pension Credit.
Do both people in a couple get a Christmas Bonus?
If you are married, in a civil partnership or living together as if you are, and you both get a qualifying benefit, each of you gets a payment. A partner who gets no qualifying benefit may still be paid when both of you are over State Pension age by the end of the qualifying week and your partner was present or ordinarily resident that week in the UK, Channel Islands, Isle of Man, Gibraltar, an EEA country or Switzerland. On top of that, one of two things must apply: you are entitled to an increase of a qualifying benefit for your partner, or the only qualifying benefit you get is Pension Credit. How couples are paid more generally is in State Pension for couples.
When is the Christmas Bonus paid, and how will it appear?
The money is paid before Christmas, to people who get a qualifying benefit in the qualifying week. You do not apply: You do not need to claim the Christmas Bonus - you should get it automatically.
Like other benefits and pensions, it is normally paid into an account such as your bank account, and it may show up as 'DWP XB' on your statement. How the rest of your pension is paid through the year is covered in when your State Pension is paid.
If you need to know the day your own bonus will arrive, ask the Pension Service, which deals with State Pension payments.
Does the Christmas Bonus count as income for Pension Credit?
No. DWP's list of things that are not counted
as income for Pension Credit includes the Christmas Bonus, so receiving it should not reduce a Pension Credit award. More on how the State Pension and other benefits interact is in how the State Pension affects other benefits.
What if my Christmas Bonus has not arrived?
DWP says: If you think you should get it, but have not by 1 January, contact the Jobcentre Plus office that deals with your payments or the Pension Service.
If you want the wider picture of what late or missing payments involve, see what to do if a State Pension payment is late. For an overview of the pension that triggers the bonus, start with the UK State Pension guide.
Christmas Bonus questions
Do pensioners get an extra payment at Christmas?
People who receive the State Pension or another qualifying benefit in the qualifying week get the £10 Christmas Bonus. Anyone who has not claimed the State Pension and gets no other qualifying benefit does not.
Do I need to apply for the pensioners' Christmas bonus?
No, it is paid automatically. If it has not arrived by 1 January, contact the Pension Service or your Jobcentre Plus office.
Do I get the bonus if Pension Credit is my only benefit?
The guarantee element of Pension Credit is on the qualifying list, so receiving it in the qualifying week can be enough.
What is the DWP XB payment on my bank statement?
That label can be the Christmas Bonus: GOV.UK says the £10 may show up as 'DWP XB' on a bank statement. If you think you have been paid it twice, the Pension Service or your Jobcentre Plus office can check.
Does living abroad stop the Christmas Bonus?
Your qualifying week has to be spent in the UK, Channel Islands, Isle of Man or Gibraltar, either physically or as your usual home. DWP points people in the EEA or Switzerland to separate guidance on benefits for UK nationals there.
The Pension Service and MoneyHelper answer questions about the bonus and the State Pension free of charge, while Pension Wise guides people who hold a defined contribution pot, also for free. Deferring, claiming now and how either sits beside your other pensions are all topics an FCA-authorised adviser covers for nothing when you book a call with this page's form.