Chancellor Rachel Reeves used a speech on Wednesday morning to confirm that the changes to winter fuel payment eligibility would be implemented before winter.
Sir Keir Starmer announced a partial U-turn on the Government’s decision to strip winter fuel payments from millions of pensioners after Labour MPs said the move badly hit the party at last month’s local elections, where Nigel Farage’s Reform UK were the big winners.
No payment for millionaires
Experts from the Resolution Foundation and Institute for Fiscal Studies (IFS) told The i Paper that it meant the only clear option for the Government would be extending the payment to pensioners on 1.3m housing and disability benefit at a cost of £300m.
Bell also appeared to rule out a number of alternative options, including tweaking pension credit rules, introducing a taper system to stop people losing the payment at a cliff-edge threshold, or creating a new system of means-testing.
Pensions Minister Torsten Bell speaking about the universal winter fuel payment before the Work and Pensions Committee, at the House of Commons. House of Commons/UK Parliament/PA WireJonathan Athow told the Commons Treasury Committee that it was possible to mirror the child benefit system for winter fuel, but that if payments are made in autumn as usual: “We would need to work out how the system worked and… if we were using the tax system to target that, it would need to follow those payments [in autumn].
Tom Waters, associate director at the IFS, said that the comments by ministers and officials on Wednesday suggested the Government had few options other than extending the payment to those on “housing benefit or disability benefit – or tying it to some other characteristic about you that the Government already knows about, that’s the general principle”.
Also reacting to the comments, Alex Clegg, economist at the Resolution Foundation, said: “The Government has committed to a partial U-turn on Winter Fuel Payments, but now faces the challenge of devising a reform that still saves money, targets those who need help the most, and can be delivered in time for winter.
“This will support 1.3m more pensioners at a cost of around £300m.”
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Read MoreShe said: “People should be in no doubt that the means test will increase and more people will get winter fuel payment this winter.”
Asked about the comments from the IFS and Resolution Foundation a No 10 source refused to comment on the details of the plan, saying it would be set out soon on the principles outlined.
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