Labour has shared an update on the Government’s plans to adjust the Winter Fuel Payment scheme, after a proposal was made for additional funds for some people. Under the new guidelines announced by the Government for the payment – which amounted to £200 or £300 last year – all people of state pension age will be eligible for support this winter.
However, those earning over £35,000 will be required to pay back the amount received. In the past, the Winter Fuel Payment was distributed widely among state pension-age recipients, but last winter, Labour introduced a new caveat meaning claimants also had to be on a means-tested benefit, like Pension Credit, before relaxing the criteria recently to let more get the money.
Yet after the recent change in stance, an MP said more people should be given money they missed out on last year. Conservative MP Andrew Snowden posed a question to the Government about the idea of “making an additional payment” to compensate those who were excluded from the previous year’s distribution but who will now qualify.
Government statistics show that approximately 1.5 million people qualified for the payment last winter, with eligibility expanding to around 9 million under the revised regulations for next year. Consequently, an approximate total of 7.5 million people could potentially stand to gain from such an additional payment.
Pensions minister Torsten Bell offered a reply from the Government on the matter. Regarding the updated policy, he said: “From this winter, individuals with an income of £35,000 or below, will benefit from a Winter Fuel Payment.
“Winter Fuel Payments are £200 for a household with someone of state pension age and £300 for a household with someone aged 80 or over. They will be paid automatically to anyone who has not opted out.
“Individuals with a taxable income above £35,000 a year will see any Winter Fuel Payment recouped via HMRC.” He added that under the new rules, “the majority” of pensioners in England and Wales would receive the payment.
However, the DWP minister did not address the issue of additional payments for those who missed out last year. Although the eligibility criteria for the Winter Fuel Payment have been expanded, some individuals may still be required to repay the money, even if their income appears to be below the £35,000 threshold.
Jeremy Cox, head of Strategy at Coventry Building Society, said: “Thousands could still unknowingly be left out in the cold – not because they’re earning more, but because their savings are. Many pensioners may not realise that interest earned on savings held outside of ISAs count towards their total taxable income.
“With interest rates still relatively high, even modest savings can generate income that pushes someone over the threshold.” For instance, a person with £20,000 in a savings account earning 4.5% would earn £900 per year in interest, which would count towards the threshold.
This is because your interest earnings are considered part of your taxable income, even if the interest earned is within your savings allowance and therefore you do not pay tax on it.
