An update on Uk Government plans to issue the heating payment to ‘more pensioners’ could be given on June 11.
Keir Starmer reveals partial U-turn on Winter Fuel Payment cut
Details on when Winter Fuel Payments could be restored to more pensioners could be announced next week. The Deputy Prime Minister Angela Rayner, recently indicated the Spending Review by Chancellor Rachel Reeves on Wednesday, June 11 could be when an update is given.
Limiting the annual payment of up to £300 to only those in receipt of a qualifying means-tested benefit such as Pension Credit or Universal Credit (for mixed age couples), was one of the earliest moves made by the Labour Government when it set out plans to deal with what it called a £22 billion ‘black hole’ in the public purse left behind by the outgoing Conservative government.
Sir Keir Starmer recently said at Prime Minister’s Questions that he wants to restore Winter Fuel Payments to “more pensioners,” claiming the UK’s improving economic prospects could allow for the move at the next “fiscal event”.
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Many in Westminster took the PM’s comments to mean the Budget in the Autumn, but Ms Rayner suggested it could come sooner during a recent appearance on Sunday Morning With Trevor Phillips on Sky News.
She said: “I think that we’ve got the upcoming Spending Review, and I’m sure that the Chancellor will set it out when we’ve got the opportunity, at the first opportunity, she will set out what we’ll be able to do.”
Asked if this means details on the Winter Fuel Payment will definitely be announced at the Spending Review, Ms Rayner added: “I don’t know, but I hope so.
“I mean, the Prime Minister has announced it, so logically to me that indicates that the Prime Minister wants to do something in this area. And if the Prime Minister wants to do that, I’m sure the Chancellor is going to look at how we can achieve that.”
Ministers are reportedly considering restoring the payment to all but the wealthiest pensioners, according to the Sunday Times, but could face delays rolling it out this winter due to ageing computer systems.
Conservative leader Kemi Badenoch called for the immediate restoration of the Winter Fuel Payment when she appeared on the BBC’s Sunday With Laura Kuenssberg, on May 25.
She said: “We need to restore it right now. We would never have taken the winter fuel (payment) away. We kept it for 14 years – we brought in the Triple Lock – we look after pensioners.”
By contrast, the Scottish Government announced earlier this year that all 1.1 million pensioners living north of the border would receive at least £100 this winter.
First Minister John Swinney confirmed to the Daily Record last month that payments of either £100, £203 or £305 would be issued by St Andrew’s Day on November 30.
Options to reintroduce Winter Fuel Payments
Full reversal
One option would be a full reversal of the decision to strip the benefit from millions of pensioners.
The decision to make it available only to those who claim pension credit last year meant those claiming Winter Fuel Payment fell by almost 90 per cent and saved around £1.5 billion a year, the Institute for Fiscal Studies (IFS) estimates.
Undoing last year’s policy change would make some 11 million more households eligible and of course wipe out the £1.5 billion in savings.
Create a specific threshold for Winter Fuel Payments
Creating a new threshold and means test would allow households not on Pension Credit to apply directly for Winter Fuel Payments.
Raising it 20 per cent above the Pension Credit threshold would cost around £100 million and see payments go to around 400,000 more families, according to the Resolution Foundation.
One option would be to model this on Child Benefit by allowing all pensioner households to claim but then require those above a certain income level to pay some back via a self assessment tax return, the IFS notes.
But there is a risk to adopting “a clunky bureaucratic mechanism for what is, ultimately, a relatively small payment”, IFS associate director Tom Waters warned.
Expand entitlement to those who get disability or housing benefits
Some 1.8 million more households could get Winter Fuel Payment at a cost of around £500 million per year if entitlement is extended to those on disability benefits, the IFS estimates.
However, this would be more complicated to put in place in Scotland, where disability benefits are devolved.
Extending eligibility to include those on housing and disability benefits would give support to 1.3 million more pensioner families at a cost of £300 million a year, the Resolution Foundation estimates.
This would be an “affordable” and “sensible way forward”, chief executive Ruth Curtice said.
Pay Winter Fuel Payments to individuals, not households
One difficulty in allocating the Winter Fuel Payment is that it currently goes to households rather than individuals.
Changing this would mean the UK Government could do a means test on an individual basis and use information that it already records for income tax purposes.
It would see pensioners with a low income but with a high-income spouse get the winter fuel payment.
However, it could also see couples get twice as much winter fuel payment as single people, where at the moment a single person would get the same amount as a couple sharing a household.
