Most pensioners will get the winter fuel payment This year, the Government revealed, as stated by Rachel Reeves. confirmed a £1.25bn U-turn .
Individuals aged 66 and older with an annual income of £35,000 or below will qualify for the payment this winter. Those who earn above this amount will receive the funds as well but will subsequently have them recovered via the taxation process.
The announcement, coming before Wednesday’s event, spending review , creates a deficit of £1.25 billion in the public accounts that the Chancellor must address during the autumn budget with either increased taxation, reduced expenditures in other areas, or accelerated economic expansion.
This move is part of an effort by the Labour leadership to strengthen support among their own Members of Parliament and the general populace following recent events. poor local election result last month.
Labour Members of Parliament broadly endorsed the announcement but cautioned ministers that they must "heed the opinions of backbenchers" regarding worries about reductions in disability benefits to prevent being compelled into an additional humiliating policy reversal on welfare.
In the Commons, MP Nadia Whittome of Nottingham East stated that the reversal was due to "significant public pressure" and encouraged ministers not to repeat this error with reductions in disability benefits.
Richard Burgon, the MP for Leeds East, called on the government to "take heed" from having to reverse course on the original winter fuel payment plan.
"What we aim to avoid is being in this situation again next year or the one after, with the Minister heading to the dispatch box having ignored the concerns of backbenchers regarding cuts to disability benefits," he stated.
Imran Hussain, MP for Bradford East, stated, "The government has clearly been listening; however, I urge them to hear the escalating demands within this assembly and abandon their proposed severe reductions to disability benefits."
Following extensive lobbying from Labour Members of Parliament, the choice to significantly broaden the criteria for receiving these payments was made. There were worries that this controversial decision might have harmed the party's standing in the local elections held in May.
The i Paper was initially reported in mid-May that a change in winter fuel policy was imminent, and was also the initial source reporting this information. accelerating a change would occur So that it will be ready in time for this winter instead of delaying until the Budget.
Last year, Reeves limited the payments to individuals receiving pension credit, totaling only 1.3 million out of approximately 11 million retirees in England and Wales.
According to the updated regulations, every retiree is eligible for the winter fuel payment, which amounts to £200 for individuals below 80 years old and £300 for those who are 80 and above—provided they do not decide to decline it via the newly established opting-out process.
Individuals earning over £35,000 annually will reimburse the funds through the tax mechanism, using either PAYE or self-assessment. According to government projections, approximately nine million people are expected to qualify for this assistance during the upcoming winter season.
Individuals receiving funds through capital gains or dividends instead of income will still qualify for the winter fuel payment.
Theoretically, the claw-back mechanism might require the estates of high-income pensioners who have passed away to return their winter fuel allowance. However, the Treasury stated that HMRC will not pursue reimbursement from individuals who owe taxes solely due to receiving the winter fuel benefit after death.
Reeves stated: "Deciding to target winter fuel payments was a difficult choice, yet it was the correct one due to the legacy passed down from the preceding government. Additionally, maintaining means-testing for these payments ensures they remain focused and equitable, instead of reinstating them universally, even for those with substantial wealth."
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“However, we have taken steps to broaden the criteria for the winter fuel allowance so that no low-income pensioner will be left without support. As a result, more than three-fourths of pensioners in England and Wales will receive this benefit during the upcoming winter.”
The updated regulations will result in savings of £450 million annually for the Treasury when contrasted with universal eligibility; however, they will cost £1.25 billion more than prior to the most recent policy reversal. The method of funding this decision remains uncertain at present, and concrete details won’t be provided until the upcoming Budget announcement.
Downing Street anticipates that reinstating the winter fuel allowance for most pensioners will appease Labour MPs who have been critical of government spending reductions. This move is also expected to help curb the ascent of Reform UK.
The conservative leader Kemi Badenoch stated: "Keir Starmer has hurriedly attempted to resolve a situation he created himself. I consistently urged him to overturn his cruel choice to eliminate winter fuel payments, but each time Starmer haughtily disregarded my critiques."
This embarrassing reversal will offer little solace to the pensioners who were compelled to choose between heat and food last winter. The Prime Minister ought to apologize for his poor judgment at this point.
Sir Ed Davey, the leader of the Liberal Democrats, stated: "At last, the Chancellor has heeded the calls from the Liberal Democrats and dedicated activists who have tirelessly pointed out the catastrophic nature of this policy. However, the extent of suffering it has inflicted should not be underestimated."
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