Winter fuel payment

growstuff

PoliticsNerd Correct me if I'm wrong, but I don't think Australians pay anything like National Insurance. What you're suggesting is that higher earners pay more into the system via National Insurance, but receive less. I think there would be a backlash. People who have paid National Insurance all their lives already receive very little more than others who haven't paid into the system but receive Pension Credit and other top ups.

Australians pay more tax than the UK. Employers have to pay 11.5% of salary into an employee's pension fund.
Government Age Pensions are means-tested and graduated.
Self-employed have to pay into their own pension funds.

The 11.5% is taken from employers even for casual workers such as backpackers, who can then reclaim that money when they leave the country.

Thank you.

What income/assets are taken into account in the Australian means-testing?

PS. UK employers currently pay 15% NICs over £5000.

Michael Gove suggested that they don't pay it to those who pay the higher rate (40%) tax. That includes me and Mr RLW, (just) but seems the fairest way of dealing with it to me. Whatever they do, there will always be those who are just over the threshold, but that's how it is with any means tested benefit.

As someone said upthread, income tax is only payable on interest and income, not savings, so those who have a nest egg for possible future care (as we do) won't be affected.

growstuff

Thank you.

What income/assets are taken into account in the Australian means-testing?

PS. UK employers currently pay 15% NICs over £5000.

www.servicesaustralia.gov.au/income-test-for-age-pension?context=22526#:~:text=We%20assess%20your%20and%20your,income%20you've%20been%20paid.

PS. UK employers currently pay 15% NICs over £5000.
I think the whole 11.5% goes into the employee's personal superannuation fund, but this will give more information.
www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super

PoliticsNerd. It isn’t necessary now or in the near future.

NIC is ring fenced. It funds only two things. An annual allocation to the NHS (33.5 billion in 2023/24) and contributory benefits.

Around 95% of the contributory benefits it funds is the State Pension - around £124 billion of the £130 billion paid out in 2023/24. The rest is maternity and bereavement benefits, the contributory elements of ESA and JSA plus some miscellaneous and admin costs.

There was a credit balance of over £86 billion sitting in the NIF at 31 March 2024. HMRC need only keep in reserve about a third of that as an emergency contingency. The reserve is invested and earned interest of almost £4 billion in 2023/24.

Jeremy Hunt’s pre-election NIC cut will absorb £10 billion of the reserve. Rachel Reeves 25 billion employer’s NIC increase is to provide additional funds for the NHS.

GAD say: Contribution income is now estimated to exceed benefit expenditure in every subsequent year of the projection period [to 2030], resulting in an increasing fund balance.

It does say that the Fund faces longer term challenges. Most significantly, the projected increase in the number of state pension recipients, relative to the working age population together with the operation of the triple lock, were expected to increase Fund expenditure relative to income. These demographic factors are still likely to lead to a reducing Fund balance in the long term.”

I think that's over-exaggerated. Currently the number of people reaching SP age each year is around 700,000 while around 600,000 existing pensioners die each year. Many of the latter will have been receiving higher two tier pensions (enhanced by SERPS/SSP) compared to new pensioners have only the single tier pension. Moneybox’s Paul Lewis has explained many times that the average pension paid under the old system is higher that that paid under the new.

While we have the system that we have, where employees have no alternative but to pay into a ring-fenced fund for up to 50 years, then they should be entitled to a pension at the end of it whatever their other means.

As a relatively recent retiree, having paid into the fund for 50 years (only 35 of which count towards a State Pension), I’d be hacked off if the government said they were now going to means-test and because I’d also been paying into a works pension scheme for 50 years, I couldn’t have a State Pension.

Pension funds are very vulnerable to market shocks. They came close to failure as a result of the Truss/Kwarteng budget and would very likely fail altogether under Reform’s fag packet economics as the nitwits want to abolish QE.

In that eventuality, what would be the backup plan if 13 million people did not have a State Pension to fall back on?

I agree with you Silverbrooks. There are anomalies in the state pension system, but it would be political suicide to break the post WW2 welfare agreement on pensions. I'd be very hacked off if I were to be means-tested now, as I paid extra to plug some gaps in my NIC record.

I shall read your information later today Silverbrooks. Thank you it looks interesting and knowledgeable.

HelterSkelter1

I shall read your information later today Silverbrooks. Thank you it looks interesting and knowledgeable.

Do you mean the Martin Lewis information on energy pricing?

It's well worth checking out the Cheap Energy Club.

Excellent, Silverbrooks.

I had to look up QE (Quantative Easing) in case others here do too

""QE" stands for Quantitative Easing, a monetary policy tool used by central banks, like the Bank of England, to stimulate economic activity when traditional interest rate cuts are no longer effective.

And why its essential to have it as a standby should interest rates greatly plunge or inflate which has an effect on everything from mortgages to stimulating growth.

Can't understand why Reform should want to do away with this safety net.

Wyllow You might want to watch Richard Murphy's commentary on this:

Reform wants to destroy the UK by destroying its money and its economy

www.youtube.com/watch?v=mKvVoGVDL5k

Note his comment ... outsource to crypto and then consider who's been paying for some of Farage's jaunts to the USA to support Agent Orange - crypto currency investor Christopher Harborne.

members.parliament.uk/member/5091/registeredinterests?page=1

A digression from pensions and WFP but worth a watch.

(Blimey - Farage's earnings are mind blowing!)

The U tube video is really easy to understand. The bill Reform put forward in Parliament totally limits the flexibility of government in difficult times to step in, ease interest rates, banks would foreclose on mortgages like in the USA.

"Reform has proposed a Bill in parliament that would destroy the ability of the UK government to create money. Worse still, it wants us to use gold – which we’d have to import – as the basis for issuing money. A policy of that sort would crash UK economic credibility and our economy"

I know this is primarily about WFA, but I’ve just read an article in the i newspaper about a woman who receives monthly
State Pension £937.65
Pension Credit £35.00
Savings Credit £52.00
She has £10,000 in premium bonds
I cannot understand this as I thought Pension Credit was to bring weekly income up to £222.00. Can anyone explain?

I might be wrong, so got calculator out: and googled to claim pensions credit

If she gets £937.65 a month then that is £11.244 a year, divide by 52 weeks it is £216.23 a week.

To claim pension credit “As a single person, your income must not exceed £227.10 per week” so she is eligible?

but I dont understand the savings credit bit.

Savings credit is essentially an extra payment to those who have saved for retirement or have higher income than the basic SP.

Wyllow3

Excellent, Silverbrooks.

I had to look up QE (Quantative Easing) in case others here do too

""QE" stands for Quantitative Easing, a monetary policy tool used by central banks, like the Bank of England, to stimulate economic activity when traditional interest rate cuts are no longer effective.

And why its essential to have it as a standby should interest rates greatly plunge or inflate which has an effect on everything from mortgages to stimulating growth.

Can't understand why Reform should want to do away with this safety net.

QE should be used in emergency situations when action is needed quickly, Covid is a good example.
In normal times the nation should “earn” its lifestyle and services, we should not borrow or use QE for social giveaways.

Means testing is often more expensive than it's worth. If they pay WFA to every pensioners Basic Rate tax then my OH would get it but not me yet we share the same heating. I think what Starmer has said is too little, too late to fend off Reform. He may as well pay WFA to all pensioners and retrieve it from Additional and High Rate taxpayers next tax year. Reeves is going to have to raise taxes anyway whatever they promised.

Crocus5

I know this is primarily about WFA, but I’ve just read an article in the i newspaper about a woman who receives monthly
State Pension £937.65
Pension Credit £35.00
Savings Credit £52.00
She has £10,000 in premium bonds
I cannot understand this as I thought Pension Credit was to bring weekly income up to £222.00. Can anyone explain?

If the pension quoted is monthly (and not four weekly) then that’s £216.38 per week.

Pension Credit tops the state pension up to a maximum of £227.10. That’s called Guaranteed Credit.

Savings Credit is an additional part of Pension Credit. It is only available to people who reached State Pension age before 6 April 2016 and have some savings above a certain threshold.

She would be entitled to Guaranteed Credt of £10.72 p.w. to top up her weekly pension to £227.10 pw and Savings Credit of £10.87 pw. That’s a total of £21.29 pw or £87 (the total of two numbers in your post) but every four weeks.

Allira

Doodledog

Fair enough, but it's going back several generations. and this is an important development for 'grans'.

🤔
My DGC have only just left primary school.

Anyway, as you were!

I'm not sure I understand. The OP is about WFP, which is important for many older people, but doesn't affect anyone's grandchildren. Threads drift, I know - I was just a bit bewildered by the total change in topic.

Doodledog

Allira

Doodledog

Fair enough, but it's going back several generations. and this is an important development for 'grans'.

🤔
My DGC have only just left primary school.

Anyway, as you were!

I'm not sure I understand. The OP is about WFP, which is important for many older people, but doesn't affect anyone's grandchildren. Threads drift, I know - I was just a bit bewildered by the total change in topic.

😀 I thought you were referring to Forest Schools!

Am I on the wrong thread? Probably. Too many distractions.

growstuff

I agree with you Silverbrooks. There are anomalies in the state pension system, but it would be political suicide to break the post WW2 welfare agreement on pensions. I'd be very hacked off if I were to be means-tested now, as I paid extra to plug some gaps in my NIC record.

I've been saying the same for years on here, and have been accused of not understanding that not everyone can afford to save, to pay into occupational pensions or pay back gaps, as if I didn't know that.

I also know that not everyone chooses to do it, that some don't see the point because they've done the sums and worked out that they won't be better off later if they do without now, and that others are happy to live off everyone else, and know that 'the state' will pick up the tab if they don't pay into the system and can't support themselves.

Many (if not most?) people want to be independent of benefits and the social control that being on them involves. They want to ensure that their later years are as comfortable as possible, but means-testing makes that more difficult, unless they can afford to save enough to give them a comfortable life when they no longer have an income from employment.

I think that the government (any government) should be very careful about increasing means-testing and not increasing minimum wages. The less advantage there is in working for a living and living on benefits, the less incentive there is to work, and the greater the impact on the economy. There are enough divisions and resentments already, and means-testing just makes things worse.

Allira

Doodledog

Allira

Doodledog

Fair enough, but it's going back several generations. and this is an important development for 'grans'.

🤔
My DGC have only just left primary school.

Anyway, as you were!

I'm not sure I understand. The OP is about WFP, which is important for many older people, but doesn't affect anyone's grandchildren. Threads drift, I know - I was just a bit bewildered by the total change in topic.

😀 I thought you were referring to Forest Schools!

Am I on the wrong thread? Probably. Too many distractions.

As were talking about Grandchildren now mine just leaving university but there are no graduate jobs for them, and you are talking about forest schools

Doodledog
I think that the government (any government) should be very careful about increasing means-testing and not increasing minimum wages. The less advantage there is in working for a living and living on benefits, the less incentive there is to work, and the greater the impact on the economy. There are enough divisions and resentments already, and means-testing just makes things worse.

Would you like to send your post, but particularly the quote in capital letters to the government -any government.
It could well be the next big thing to raise money, alongside the proposed or predicted tax rises and the impact you mention needs to be taken into consideration!

That should have read The less advantage there is in working for a living as opposed to living on benefits, the less incentive there is to work, and the greater the impact on the economy.

Sorry if that wasn't clear. I'm very tired

I read it as “instead of living on benefits” so I got your drift Doodledog.

Pension Credit does bring single persons income up to £227.10 Savings Credit is being phased out. In addition, if that person is awarded Attendance Allowance there is an additional component of Pension Credit paid of more than £80 p.w, (Severe Disability Premium) So total income woukd be more than £300p.w. Plus Attendance Allowance of £80 or £100 p.w. In addition no Council Tax would be paid.

Still think that everyone in receipt of Pension Credit is on a low income?