NINE million pensioners will receive the winter fuel payment THIS YEAR after a humiliating government u-turn.
Chancellor Rachel Reeves has expanded the threshold for receiving the benefit allowing the elderly with a pension below £35,000 will get the benefit.
Chancellor Rachel Reeves[/caption]
Rachel Reeves axed the universal winter fuel payment last July[/caption]
Ministers will be left red-faced with the change costing £1.25 billion with the new means-testing saving Treasury coffers around £450 million.
Ms Reeves axed the universal winter fuel payment last July just weeks after entering office in a bid to save £1.5 billion – after claiming the Tories had left a £22 billion financial black hole.
She said: “Targeting Winter Fuel Payments was a tough decision, but the right decision because of the inheritance we had been left by the previous government.
“It is also right that we continue to means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
Biggest u-turn in history
By Jack Elsom, Political Editor
AS political u-turns go, Rachel Reeves’ retreat on winter fuel payments will surely go down as one of the biggest – and messiest – in history.
Her first act as Chancellor to snatch the cold weather cash from 10million pensioners has today been spectacularly dumped.
Nine million OAP will now get the benefit, meaning all but the richest will claw back the £200-£300 sum.
With a price tag of £1.25billion, this whole palaver has only saved the Treasury £450million.
It’s chicken feed in the grand scheme of things, and a tenth of the annual migrant hotel bill.
But the political cost has been devastating.
Labour insiders trace their spanking at last month’s local elections back to Ms Reeves’ toxic decision in the weeks after the election.
That the winter fuel policy was still coming up on doorsteps 10 months later was a sign it was destined for the shredder.
Yet rather than ripping off the plaster cleanly, the past few weeks have seen an agonising u-turn mired in chaos and confusion.
Four years is a long time until the next general election, and Sir Keir Starmer and Ms Reeves will be hoping voters would have since moved on.
But – even with today’s backing down – the winter fuel debacle is likely to live long in the memory of the electorate and haunt Labour for a very long time.
“But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out.
“This will mean over three quarters of pensioners receiving the payment in England and Wales later this winter.”
The payment will be £200 per household or £300 per household where someome is over the age opf 80.
Eligibility will be based on the individual’s age and location during the third week of September this year. The person will have to have reached state pension age by September 21 this year to be eligible.
Pensioners will not have to take any action to receive the payment, it will come through automatically. For those above the threshold it will be automatically clawed back through HMRC.
Three-quarters of people of state pension age in England and Wales are now expected to get payment this winter worth up to £300 a year.
Only around two million individuals in England and Wales over the state pension age will miss out as they earn too much.
How do I apply for pension credit?
YOU can start your application up to four months before you reach state pension age.
Applications for pension credit can be made on the government website or by ringing the pension credit claim line on 0800 99 1234.
You can get a friend or family member to ring for you, but you’ll need to be with them when they do.
You’ll need the following information about you and your partner if you have one:
- National Insurance number
- Information about any income, savings and investments you have
- Information about your income, savings and investments on the date you want to backdate your application to (usually three months ago or the date you reached state pension age)
You can also check your eligibility online by visiting www.gov.uk/pension-credit first.
If you claim after you reach pension age, you can backdate your claim for up to three months.
The threshold is seen by the Treasury as “well above” the income level of pensioners in poverty and is being seen as broadly in line with average earnings.
The costs will be accounted for in the Budget this autumn with the Chancellor taking decisions in the round to ensure her non-negotiable fiscal rules are met.
Tory leader Kemi Badenoch blasted: “Keir Starmer has scrambled to clear up a mess of his own making. I repeatedly challenged him to reverse his callous decision to withdraw winter fuel payments, and every time Starmer arrogantly dismissed my criticisms.
“This humiliating u-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter. The Prime Minister should now apologise for his terrible judgement.”
The decision was in part triggered after Labour suffered a brutal set of results at the local elections last month as Nigel Farage’s party surged.
Ms Reeves ditched the winter fuel payments to all pensioners in one of her first major acts as Chancellor last July blaming the state of the public finances.
But the move only saved Treasury coffers around £1.5 billion but the decision provoked fury from OAPs and charities.
The Chancellor last week revealed there would be a “means test” but stopped short of saying how it will be funded.
She said: “People should be in no doubt that the means test will increase and more people will get winter fuel payment this winter.
“As we have been clear, on winter fuel we will set out how we will fund that at the next fiscal event.
“We will set out how everything will be paid for at the budget in the autumn but it’s important that everything that we do is funded, because that’s how people know that we can afford it.”
The about-turn came after Sir Keir Starmer revealed more pensioners would be receiving the benefit following the outcry.
It meant a huge reduction in those receiving the benefit with numbers falling from 11.4 million to just 1.5 million.
But there was a word of warning that the payment wouldn’t return to being universal for all pensioners before the decision was made last year.
Pensions Minister Torsten Bell said last week: “Is there any prospect of a universal winter fuel payment? The answer is no.
“Most people – ninety-five per cent of people – agree that it is not a good idea that we have a system paying a few hundred pounds to millionaires.”
