Winter fuel payment

M0nica

I cannot see that using the tax band of someone's house is a fair way of deciding who gets WFA and who doesn't, I assume Martyn Lewis was assuming a low tax band for a property equated with a lower income.

However, nowadays when many older people downsize to a smaller property, a house or a flat, possibly in a retirement complex, then they are going to be in lower tax band properties, even though they have very comfortable incomes and possibly, significant savings and investments.

Wow! Where are all these smaller properties for all the well-minted pensioners with "significant savings and investments" to downsize to?

M0nica

I cannot see that using the tax band of someone's house is a fair way of deciding who gets WFA and who doesn't, I assume Martyn Lewis was assuming a low tax band for a property equated with a lower income.

However, nowadays when many older people downsize to a smaller property, a house or a flat, possibly in a retirement complex, then they are going to be in lower tax band properties, even though they have very comfortable incomes and possibly, significant savings and investments.

That’s an appalling idea, and it varies so much countrywide.

The benefit threshold was easy and quick to administer, I would be in favour of increasing that to benefit + a set sum not sure how you administer it.

I am dead set against returning to WFP for all that’s a waste of money

Yalland444

Martin Lewis from Moneybox is suggesting on Radio 4 News tonight that WFA be given only to those in Council Tax A to C. He thinks that will be fair……. I for one have a small family home which is Council Tax D but my annual income is such that it just takes me over the limit that I could claim income credit so I would still be in the same boat.

Do you mean Paul Lewis? AFAIK he is not related to Martin Lewis.

Mollygo

See what I mean M0nica. 1.

But it's true!

avalon123

It should be part of declared income for taxation, which would be fairer on everyone as it will taper down for lower incomes. Why they didn't introduce this last year beats me and there would have been none of the bad publicity that ensued. FWIT a very distinguished professor of economics agrees with me!

That's the same as including it in the state pension. Although the state pension isn't taxed (yet), it is included in taxable income for people with other income (which WFA would be), so it would be taxed in the normal way.

To do this to old people was hardly what I or anyone expects from a Labour government.

Old people are the easiest to attack.

Look how they were blanket blamed for Brexit, even on GN.

Their savings can be taxed even though they’re no longer earning in order to supplement them.
Withdraw benefits-nothing they can do.

They have no levers like withdrawal of services that would impact on the government.

And best of all, they will be reduced in number by the time the next election comes round.

A win-win situation for Labour.

How will old people be reduced in numbers before the next election Mollygo- more join the ranks as they retire than leave them due to death every year, surely?

Casdon

How will old people be reduced in numbers before the next election Mollygo- more join the ranks as they retire than leave them due to death every year, surely?

Oh yes Casdon but the old people in the next election won’t be the same old people who voted in the last election will they?

There will be a whole new cohort with no value in the government’s eyes.

Even the 18 year olds who were able to vote in the last election will be older by the next election.

That’s what happens to people.

Mollygo People's savings aren't taxed - the interest on the savings is taxed, if it's more than £1000, which is right because it's unearned income.

People's occupational or private pensions are taxed because they don't pay tax on the contributions. For some people, it's tax efficient because they sometimes pay a higher rate of tax when they're working than when they retire.

growstuff

Yalland444

Martin Lewis from Moneybox is suggesting on Radio 4 News tonight that WFA be given only to those in Council Tax A to C. He thinks that will be fair……. I for one have a small family home which is Council Tax D but my annual income is such that it just takes me over the limit that I could claim income credit so I would still be in the same boat.

Do you mean Paul Lewis? AFAIK he is not related to Martin Lewis.

Yes it’s Paul Lewis ( Moneybox)
Easy to mix them up tho.

As for Brexit, just about every survey showed that people over about 45 were more likely to vote to leave than remain. That would appear to be a fact. It's only "blaming" if you think the decision was wrong.

Oreo

growstuff

Yalland444

Martin Lewis from Moneybox is suggesting on Radio 4 News tonight that WFA be given only to those in Council Tax A to C. He thinks that will be fair……. I for one have a small family home which is Council Tax D but my annual income is such that it just takes me over the limit that I could claim income credit so I would still be in the same boat.

Do you mean Paul Lewis? AFAIK he is not related to Martin Lewis.

Yes it’s Paul Lewis ( Moneybox)
Easy to mix them up tho.

They are quite different people and have different styles and messages.

Surely it is means tested? Those who are in receipt of pension credit still receive fuel allowance.

Unfortunately, some people who aren't eligible for pension credit are still struggling to manage financially because they are only just over the threshold. But that happens with other benefits doesn't it? I believe there is some unfairness in the child benefit system.

I don't see why pensioners who have a very good income should receive fuel allowance. Many families with young children are really struggling and even those that have what would have been considered a good income are finding it difficult to pay rents/service charges or mortgages and child care costs.

Off topic but relevant.

156 UK billionaires have combined wealth of £619.5 billion (£619,500,000,000).

A 2% wealth tax on 156 people would raise over £12 billion a year.

We know the previous government looked after its own but why is Labour so shy of taxing the very wealthiest?

There’s no need to tinker around with small stuff like WFP for all the division it causes.

equalitytrust.org.uk/evidence-base/billionaire-britain-2025/

Mollygo

Casdon

How will old people be reduced in numbers before the next election Mollygo- more join the ranks as they retire than leave them due to death every year, surely?

Oh yes Casdon but the old people in the next election won’t be the same old people who voted in the last election will they?

There will be a whole new cohort with no value in the government’s eyes.

Even the 18 year olds who were able to vote in the last election will be older by the next election.

That’s what happens to people.

The first thing that came to mind. This always puts my downbeats up again.
www.youtube.com/watch?v=v1Phsgg_JzI

PoliticsNerd

Don't take umbrige so quickly ferry23. I wasn't suggesting that you did expect the government would pay you after death.

What I was pointing out was that government need to make schemes work for the tax payer. After all, we all know by now that the the proportion of our NI tax allocated to pension payments didn't go to pay our pensions, it went to paying the previous generations. Our state pensions are paid by the tranche who are current earning through work. The government has to take their taxation into account too and must set up a system that can continue.

Some pensioners pay tax too.

Allira

PoliticsNerd

Don't take umbrige so quickly ferry23. I wasn't suggesting that you did expect the government would pay you after death.

What I was pointing out was that government need to make schemes work for the tax payer. After all, we all know by now that the the proportion of our NI tax allocated to pension payments didn't go to pay our pensions, it went to paying the previous generations. Our state pensions are paid by the tranche who are current earning through work. The government has to take their taxation into account too and must set up a system that can continue.

Some pensioners pay tax too.

Unless people live totally off-grid and never buy anything, everybody pays some sort of tax.

growstuff

I don't understand why it isn't added to the state pension. As Silverbrooks has pointed out, the money doesn't have to be spent on fuel, so it's a general supplement for pensioners. It would then be taxed back progressively for higher earners rather than creating a cliff edge. However much the threshold is, there will always be those who just miss out and will feel aggrieved.

Well, that's far too simple and sensible growstuff.

If it's incorporated into the SP and not an added benefit such as the Christmas bonus and the WPA as it was, then it couldn't be taken away again. The Government might be hesitant to do that.

Allira

growstuff

I don't understand why it isn't added to the state pension. As Silverbrooks has pointed out, the money doesn't have to be spent on fuel, so it's a general supplement for pensioners. It would then be taxed back progressively for higher earners rather than creating a cliff edge. However much the threshold is, there will always be those who just miss out and will feel aggrieved.

Well, that's far too simple and sensible growstuff.

If it's incorporated into the SP and not an added benefit such as the Christmas bonus and the WPA as it was, then it couldn't be taken away again. The Government might be hesitant to do that.

Well, it could be taken away. All the government would have to do is recalculate the way the state pension increases every year. Eventually people would forget that there was ever a separate winter fuel allowance.

Allira

PoliticsNerd

Don't take umbrige so quickly ferry23. I wasn't suggesting that you did expect the government would pay you after death.

What I was pointing out was that government need to make schemes work for the tax payer. After all, we all know by now that the the proportion of our NI tax allocated to pension payments didn't go to pay our pensions, it went to paying the previous generations. Our state pensions are paid by the tranche who are current earning through work. The government has to take their taxation into account too and must set up a system that can continue.

Some pensioners pay tax too.

Of course.

If the WFA were added to state pension, it would be just less than an extra £4 a week. Most pensioners with any additional income pay 20% tax on the additional income, so the WFA "supplement" would be £3.20 a week for basic rate taxpayers, which is hardly a fortune. Over time, the government could change the state pension increase from a triple lock to a double lock (or use some other criteria), so could claw the money back.

Silverbrooks I agree that billionaires should pay more tax and don't really understand why Labour won't do this.

The rich are definitely getting richer and the poor are getting poorer. I read that Elon Musk alone is worth almost a trillion dollars. It is crazy.

Not so easy though as WFP is paid per household in which individuals may have different marginal rates or one or other have no income tax liability at all.

This was one of the arguments against withdrawing WFP from those with high incomes:

It’s worth reading the closing paragraphs of:

researchbriefings.files.parliament.uk/documents/SN06019/SN06019.pdf

It has been suggested that the Winter Fuel Payment should be withdrawn from higher income pensioners, but it is not always clear what income threshold proponents have in mind. The Winter Fuel Payment could be withdrawn from those paying higher rate income tax, but relatively few Winter Fuel Payment recipients are higher (or additional) rate taxpayers.

Whatever the income/wealth threshold chosen, there is the question of how would identify those affected each year. In addition, one would have to decide whether income/wealth should be measured on an individual or household basis. Looking at income/wealth in an individual basis could result in, for example, partners of millionaires who have no income themselves receiving a Winter Fuel Payment. Basing entitlement on household income might be seen as fairer, but could involve introducing a complicated and expensive means-test, reducing the savings from the measure.

Withdrawal at a certain threshold would also create a “cliff-edge” problem. This could be tackled by introducing some sort to “taper”, as has been done for the Child Benefit High Income Charge, but this could be complicated and expensive to administer.

It’s worth reading the whole paper. If more people did they would have a better understanding of why it was left as it was for 27 years and should have remained that way.

I'm not saying there isn't a way to claw back WFP from people with high(er) incomes. Most will file a tax return and require an end of year assessment so it would be easy to do but it's debateable whether the tax recovered would exceed the overall benefits of spending the £200 in the economy. Most people would pay an extra £40 tax - precisely the same as spending £200 on something that attracts 20% VAT.

It would be so much easier to pay it universally in the first instance and let people spend it how they chose.

Mollygo

See what I mean M0nica. 1.

I’m still counting.