Winter Fuel Payments have been on everyone’s mind since the cuts were announced.(Image: Shared Content Unit)A new proposal regarding Winter Fuel Payment eligibility has surfaced, angering pensioners further. According to The Times, the government has a plan to provide £300 Winter Fuel Payments to all state pensioners, only to later reclaim that amount through taxes administered by HMRC.
Reports from The Times indicate that approximately half of those eligible for the payment as they are of state pension age, but who have an annual income exceeding £37,000, would end up repaying the amount through increased tax bills.
This could also involve recovering the payments from the estates of individuals who received the benefit but passed away before their tax obligations were settled.
That means if you are a pensioner with an income above the new threshold, you are likely to receive a payment this winter. However, this amount will be reclaimed by HM Revenue & Customs the following year. For those who file a tax return, this may occur through self-assessment, while others will have their tax code adjusted, resulting in an additional tax of approximately £17 to £25 each month next year.
Treasury staff are understood to be working on an announcement that will come as early as next week’s Spending Review, following last week’s backtrack.
The measures rely on existing data sharing arrangements between HMRC and the Department for Work and Pensions. Child benefit is already taken from higher earners in a similar way through tax.
One Labour source told the Guardian: “We should never have scrapped the winter fuel allowance in the first place, but the whole process of reinstating it has been completely chaotic. The optics of us demanding the money back from grieving families are dire.”
Unite general secretary Sharon Graham said: “Most people now recognise that the winter fuel cut was a massive mistake. Unite has been calling on the government to scrap the cut from day one and I was pleased when the PM finally acknowledged this.
“We are the sixth richest economy in the world, and we need to stop picking the pockets of pensioners and bring in a wealth tax.”
Speaking in Rochdale on Wednesday, Chancellor Rachel Reeves had said: “We have also listened to the concerns that 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.”
The government brought an end to the universal winter fuel benefits last July within a month of coming into power. But when pressed about whether the winter fuel payment would return across the board, Pensions Minister Torsten Bell said the answer was “no”.
He said: “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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