The Treasury is reportedly looking at linking the payments to people’s incomes instead of pension credit, which could mean the universal benefit is restored then recouped
Ministers are considering restoring universal winter fuel payments for all pensioners – then taking back the support from richer OAPS.
Chancellor Rachel Reeves is expected to set out the details of the Government’s winter fuel payments U-turn next week in her Spending Review. She confirmed yesterday that an expansion of eligibility rules will be in place by this winter but did not confirm who would be eligible.
Currently, only pensioners are eligible if they receive pension credit, which can be claimed by OAPs whose income is less than £11,500. The Treasury is said to be looking at linking the payments to people’s incomes instead of pension credit.
Ministers would do this by initially giving back the up to £300 payments as a universal benefit to 10 million pensioners, according to multiple reports. They would then recoup the money from about five million OAPs through higher tax bills over the next financial year.
READ MORE: Winter fuel payments WILL be available to more pensioners this year says Rachel Reeves
Jonathan Athow, a senior director at HMRC, yesterday highlighted how a similar system works for child benefit. “What we have done with the child benefit charge shows there is a flexibility in the tax system that shows it does not require self-assessment,” he told MPs.
But the Guardian raised concerns that some bereaved families could face requests for their dead relatives to return winter fuel payments. This is because there could be a six-month gap between pensioners receiving the initial payment and then some being asked to return it when they fill in their tax returns, the newspaper said. There are fears thousands of pensioners could have died in that time.
Asked about the reports, Education Secretary Bridget Phillipson today refused to be drawn on the details. She said: “I can’t comment on speculation. It’s not for me to make announcements around precise mechanisms as to how this will be delivered, but what I can say is that we do want more pensioners to receive the winter fuel allowance and the Chancellor (and) the Prime Minister will set out how that will happen. “
She added that she did not think “multi-millionaires” should get the winter fuel allowance.
Ms Reeves yesterday said pensioners will get the winter fuel allowance this year. Pressed by the Mirror on winter fuel payment eligibility at an event in Rochdale, the Chancellor said: “We have listened to the concerns people had about the level of the means test.
“So we will be making changes to that. They will be in place so that pensioners will be paid for this coming winter.” It comes after pensioners were left in the dark on how many people would be eligible – and when the changes would come into effect.
The Government announced cuts to the winter fuel payments not long after the election last year. They faced a huge backlash after stopping the support being paid universally and instead changing to a means-tested system.
Pensions Minister Torsten Bell yesterday ruled out returning to universal winter fuel payments. He confirmed the Government will not be returning to a system in which millionaires receive the benefit.
He told MPs: “On your question of is there any prospect of a universal winter fuel payment, the answer is no, the principle I think most people, 95% of people, agree, that it’s not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we’re not going to be continuing with that. But we will be looking at making more pensioners eligible.”
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