U turn on winter fuel payments- is it a good move?

They’re calling it the widows’ tax- as a couple would each be entitled to their £35000 threshold and probably at least one if not both might be eligible.
Not a widow(er) who is not getting her late DH’s pension.

Thanks for the clarification Silverbrook about Sunak.

If one has a gross income of £35,000 that leaves a net of income tax income of £30,500 (rounded). £4,500 paid in income tax.

From that, you have to find local taxes (say £2,400 a year which is what I pay) bringing the net income after the two major taxes to £28,000 (rounded).

£7,000 gone in taxes.

www.retirementlivingstandards.org.uk/ say that a single person needs to spend £31,700 a year to have a moderate standard of living. People may or may not agree with that but that’s what they say:

Some will argue there are luxuries in there but it’s the difference between living and existing and I think we are all entitled to that - the diffferent between running a small car or not, or having a holiday once a year.

Whether this kind of analysis has factored into where to set the cut off is not known.

Oreo

I can never understand why they did it Silverbrooks it filled me with dismay that a newly elected Labour government could have done something like that!

The timing was appalling.

It gave no time for those on low incomes to consider where they might (if they even could) make savings to compensate. No time to prepare to lose what is, to someone who is really watching the pennies, a lot of money.

So many pensioners must have been relying on the payment.

... and all to save so little on the scale of things.

I was born in the war, one if the lucky ones, no money but no one had, lots of jobs about when i left school at 15, worked hard and got my first house when i married at 19, always had a couple of jobs on the go. Youngsters now lucky to get a job lots on nil contracts, its not fair on them, I have my state pension I paid into all my life, so hardly well off, but can manage without heating allowance as most can. We should be helping the young. A lot of pensioners just moan. The people at fault are the government anyone on low pay and working should not pay tax until they earn 20k.the people on very high wages should pay more. Stop immigration until our people here have homes, it is plain stupid just letting people in. Illegals should go back along with any offspring, anyone here that doesn't learn English can't work so they are a drain on those working. Its a privilege being here not a right, no winder there are problems burying heads in sand. Its not about race.

It was Sunak. It was a Prayer against a Negative Statutory Instrument sponsored by Sunak and signed by 81 Tories.

Motion text

That an humble Address be presented to His Majesty, praying that the Social Fund Winter Fuel Payment Regulations 2024 (S.I., 2024, No. 869), dated 22 August 2024, a copy of which was laid before this House on 22 August 2024, be annulled.

This was the vote:

Social Fund Winter Fuel Payment Regulations 2024 (SI, 2024, No. 869): motion to annul

228 Ayes, 348 Noes - all Labour because they were whipped:

votes.parliament.uk/votes/commons/division/1840

Oreo

Of course it wouldn’t.I was just pointing out that if you don’t do self assessment now you won’t need to in the future.
It will be clawed back.

My misunderstanding. I thought you were implying that those people would get away with paying back their WFA.

Exactly, stupid to think it was anything else but a bad press for a year and a fear of Reform and unrest from the backbenches.
But do go ahead and post your own comments on why they decided to bring back the WFA up to an income of £35,000 before tax.

I apologise for misquoting you Oreo. The word that you used yesterday for those not seeing this as you do was " stupid "

This won't be straightforward as people are taxed individually while the WFP is paid to a household.

Further complications will arise in a three or more pensioner household. It's not so uncommon to have a pensioner parent living with a pensioner child and their pensioner partner or some combination of.

DWP already tell HMRC what State Pension someone receives.

The fine tuning needs to be done but if a cut off date is set to opt out (more admin) then by April 2026, DWP should have been able to tell HMRC who has been paid what so that payment can be clawed back.

It's still a lot of extra work. Although I do think it's a decent compromise it would have been far simpler and cost effective to leave things as they were before last July and for the Treasury to take the extra tax yield from people spending the money in the general economy - which they have been doing for the last 24+ years or donating the payment to charity as many did.

AFAIK, nobody has quantified the loss to Christmas charity appeals.

What a mess and huge fuss that could have been avoided.

I can never understand why they did it Silverbrooks it filled me with dismay that a newly elected Labour government could have done something like that!

Silverbrooks

There always was dissent from Labour MPs but many of them were only newly-elected when Sunak forced the vote last September.

Some were seen crying in the lobbies whipped into voting for something they thought was wrong. The only one who defied the whip was Jon Trickett.

A reminder of what happened:

www.theguardian.com/politics/2024/sep/17/labour-mps-missed-winter-fuel-vote-feudal-warning-by-whips

Almost a year on, those new MPs will have found confidence and allies enough to make a stand against what was always wrong.

Starmer not Sunak 😃

Of course it wouldn’t.I was just pointing out that if you don’t do self assessment now you won’t need to in the future.
It will be clawed back.

Oreo

For those who do get £35,000 or over who don’t do any self assessment as regards tax, I have read that will continue and they don’t need to do anything.

Pension companies inform HMRC directly of the pensions they pay out. It wouldn't be rocket science for HMRC to work out who is receiving more than £35,000.

There always was dissent from Labour MPs but many of them were only newly-elected when Sunak forced the vote last September.

Some were seen crying in the lobbies whipped into voting for something they thought was wrong. The only one who defied the whip was Jon Trickett.

A reminder of what happened:

www.theguardian.com/politics/2024/sep/17/labour-mps-missed-winter-fuel-vote-feudal-warning-by-whips

Almost a year on, those new MPs will have found confidence and allies enough to make a stand against what was always wrong.

Primrose53

growstuff

Primrose53

To be honest they are running scared! There was such anger and resentment when they stopped the WFA that they could do nothing else but reinstate it. They completely misread the situation like they do with pretty much everything else.

People are fed up with seeing them giving billions to other causes and ignoring British people who have worked, paid taxes etc all their lives.

We have 32,000 illegal immigrants put up in hotels at our expense and 70,000 in other forms of accommodation. It is costing us BILLIONS and if it wasn’t true would be laughable!

It is high time they put their own countryfolk first.

The government doesn't ignore British people. If you look about you, it is younger British people who are moaning about older people receiving a benefit. Illegal immigrants have nothing to do with it.

Illegal immigrants have very much to do with this! If we weren’t stupid enough to be forking out billions on people who should not even be here, we could comfortably look after our own people first. Other countries have realised this ….. eg The Scandinavian countries and are doing something about it.

Well said Primrose53.

For those who do get £35,000 or over who don’t do any self assessment as regards tax, I have read that will continue and they don’t need to do anything.

Labour was facing dissent from some of its own backbenchers.

Chocolatelovinggran

Oreo, I don't know what caused this decision, and I don't think that you do, either.
Giving your views - " I believe this.." is different from " people who disagree with my mindset are fools".

So, where do I say that those who disagree with my mindset are ‘fools’ ? Actually I didn’t.
So you can’t say why the decision was taken then? You could have a pretty good guess am sure.
I see the amount of bad publicity and anger over the decision to take it away over the last year, not just from pensioners and bodies like Age UK but from Unions and many back benchers and just about any Joe Public added to the swift rise of Reform and how they did in the local elections and the fear of them doing even better must have swung it for this new decision to have taken place.
Reeves and Starmer have spent all year doubling down on the policy decision and how it was the right thing, and now this capitulation.It’s good of course but they will be associated with this debacle for the rest of their term.

FranP Setting the threshold at £35,000 very firmly destroys the argument about poor pensioners being denied help.

I’ve not seen anything clarifying if it’s income before or after tax

I assume it’s income before tax.

When HMRC send me my tax information at the start of the new tax year, it shows my state pension plus my works pension as income. It then goes on to say what tax they foresee me paying.

Thankfully, I receive nothing like the £35k.

The thing in FranP is that there hasn't been been a massive uptake in pension credit. Only 6% of those 760,000 households said to be eligible have made a successful claim since last July- just 45,800 from 760,000 households. That leaves over 700,000 households not claiming for whatever reason and as much as £1.5 billion Pension Credit going unclaimed.

If the limit to pay WFP now is set too low, say at £20,000 as someone else suggested, it means that millions of pensioners with relatively low incomes will have to self assess for tax so that the payment can be clawed back. Many won't find that an easy process.

It could be argued that a large proportion of people in the £35,000+ income bracket already do self-assess so they are in the system and know what to do each year.

The administrative load and costs are a major factor in this.

Means testing is hugely expensive. It's hard to find numbers but 15 years ago it was costing £450 a case to means test for Pension Credit.

Far easier to pay WFP to every household and claw back through tax. Many may chose to opt out.

I think this is a decent compromise.

The LP are just running scared after the Reform party has done so well lately and this about turn shows them up for having made the mistake in the first place.
I think it's the right thing to do and will be a great help to many. I do wonder how the money will be recouped from those with an income over £35k via HMRC and how much it will cost to do this. It would have been so much better if they had just left it in place in the first place.

Martin Lewis says it is complex www.facebook.com/reel/1215148450075328.

I think it is brave to make the change, but I am not at all sure that I agree totally. Those who really need it are probably already on benefit of some sort. The massive increase on uptake of pension credits has shown this.

However, if you are fit and healthy, then perhaps over 85 you are more sedentary and possibly need heat.

Fuel is FAR cheaper than it was last year - I have not done the math, but perhaps if you could pay with the subsidy last year, then you could pay without it this year

Certainly the limits both on pension credit, zero tax need to be looked at given that most on basic pension are now paying tax - so this is a better battle than fuel.

keepingquiet It's for those with income under £35K. I feel it is like the child allowance how its based on individual income, eg, someone earning £34k and a parter earning £33k will both be eligible with a total income of £67k whilst someone on their own with income of £35,500 will not get any allowance. I've not seen anything clarifying if its income before or after tax. Does it take more to heat a house with one or two occupants?