The Government has said it will partially reverse its decision to strip the Winter Fuel Payment from all but the poorest pensioners.
Last year, the payment – which is worth up to £300 – went only to those pensioners in receipt of Pension Credit, but the Government has said it wants to widen eligibility.
Chancellor Rachel Reeves said people “should be in no doubt that the means test will increase and more people will get Winter Fuel Payment this winter”.
However, it has also been confirmed that not everyone will be eligible, so confusion continues over how this will be tested and whether payments will need to be returned to the tax collector in the same way as Child Benefit by those over a certain earnings threshold.
Possible clawback
Experts say one solution is to award the payment to everyone and then claw back the money through tax returns.
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Tom Selby, director of public policy at DIY investment group AJ Bell, said this could be “easier said than done”.
“This might look something like the process for clawing back Child Benefit for working households, although that has caused mass confusion among taxpayers bamboozled by the complexity of the rules,” he said.
No return to universality
Torsten Bell, the pensions minister, has also spoken on the U-turn. He told MPs at the Work and Pensions Committee that there would be no return to the payment going to all pensioners.
He said that “I think most people – 95% of people – agree that it’s not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we’re not going to be continuing with that. But we will be looking at making more pensioners eligible”.
Reeves is expected to give more details on the change at the Spending Review next week.
