Five million pensioners could get winter fuel allowance reinstated this year under Labour’s humiliating climbdown, it was claimed today.
However, millions more face higher tax bills to ‘claw back’ the benefit – worth up to £300. And there are concerns that bereaved families could be hit with unexpected demands for cash.
The complicated solution has been mooted after months of scrambling to defuse fury at the policy.
It was one of the first announcements
Rachel Reeves
made after entering No11, and has been blamed for triggering the dramatic slump in Labour’s popularity.
Keir Starmer
dramatically announced a U-turn on the plans last month, without saying what exactly was being proposed or when it would take effect.
Yesterday the Chancellor confirmed confirmed the changes would be in place ‘this winter’ – but was still unable to say who will qualify.
She also said the Government will not set out how the reinstated payments will be funded until the Autumn Budget.
Designing a cost-effective means test for the benefit – which ministers are adamant should not be paid to ‘millionaires’ – has been causing major headaches for officials.
According to the Times, the Treasury has drawn up an option that would hand winter fuel payments to all 10million pensioners this season.
But there would then be an equivalent tax charge for those with incomes above a threshold.
That could be set at the average household disposable income of £37,000.
In that case around half of pensioners would end up paying back the allowance to the Treasury later.
But there are concerns that the government would end up chasing repayments from the families of pensioners who die after receiving the handouts, but before the tax settlement.
Pensions minister Torset Bell is facing an angry backlash after he claimed that scrapping the winter fuel allowance had ‘no effect’ on the health of older people.
Mr Bell told MPs that among those who had been hit by the cuts ‘we see no differential effects on their health’.
Dennis Reed, of over-60s campaign group Silver Voices, said: ‘It is a ridiculous thing to say.
‘We know from our own members that a lot of people have been shivering in their homes with their overcoats on last winter because they were too afraid to put the heating on.
‘Many conditions, such as arthritis and respiratory conditions, are made worse by the cold – how can he possibly claim it’s had no effect?’
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