As you probably know, the planned cuts to winter fuel payments were voted through parliament this week.
Whilst pressure mounts, there is a very slim chance of a government U-turn or at least mitigating measures being put in place. At least for now though we are to assume that this change will go ahead.
If you are puzzled by the changes to the winter fuel payments, or are worried about the impact of the changes to Yours or a Family members finances, here is I hope a clear explanation of what’s going on.
How it was
Winter fuel payments were introduced in 1997 to help pensioners and low income households pay for their heating bills.
It was a universal payment, open to everyone of state pension age.
Around 11 million people benefited from the scheme.
How it will be
As of September 2024, Winter fuel payments will be means tested.
Those of state pension age who also claim Pension Credit or other benefits such as Universal Credit or Income Support will be eligible for a payment of £200, of which those who are over 80 will receive an additional £100.
It is a one-off, tax free payment made automatically during the months of November or December.
Now around 1.5 million people will benefit.
What is Pension credit
Pension credit is an additional payment to those of state pension age, who are low earners, to top up their income.
If a person’s income is less than £218.15pw as a single person, or £332.95pw as a couple they are eligible for pension credit.
It is a gateway benefit, because it opens up eligibility to a number of other benefits such as free TV licencing and discounts on council tax.
What to do
There are pensioners who have low incomes, who do not quite meet the eligibility criteria for Pension Credit, and will lose out on winter fuel payments. It is estimated by Age UK that around 2 million people are in this bracket.
It’s important to look at what makes up your income. State and private pensions and employment/self-employment earnings are included. But things like disability payments and housing benefits are not. Therefore it may be that your total income (excluding those items out of scope) will mean you’re eligible for pension credit.
On top of this, there is a sizeable group of people (estimated by a previous Government to be 850,000 households) that are comfortably eligible for Pension Credit but have not claimed.
If you think you’re one of them, you can claim online on GOV.UK or call the Pension Credit claim line on 0800 99 1234 and they can fill in the application for you over the phone (lines are open Monday to Friday, 8am-6pm). If you need any help with this, please let me know.
Not only will you receive your pension top up but also your winter fuel payment.
Wider impact
Many pensioners acknowledge they were previously in receipt of winter fuel payments, but did not need them. Some payments were even made to qualifying ex-pat households living overseas in places like Spain.
Some pensioners intentionally didn’t claim at all, even though they were eligible. Some claimed, and donated the money to their chosen charity.
However there will be millions of people, just above the eligibility thresholds that will have to make very difficult choices this winter. Tapering of the payments could be a possible way of addressing it.
As it stands, the cuts that are expected to be worth £1.5bn will make a small dent in the £22bn black hole alleged in the budget handed down by the Conservatives. We have just over 6 weeks until we find out where the rest of it is coming from.
If I can help or advise in any way, please let me know.
.png)
Comments