Winter Fuel Allowance under discussion by Martin.

Grumpy_chap

michaels said:

The administratively cheap and logically fair thing to do do avoid the cliff edge where pensioners who earn a penny more a week than the threshold and are not eligible for pension credit and thus this 200/300 payment is to roll the payment into pension credit by increasing the pension credit threshold and allowance.

However politically this would be seized on by opponents as 'scrapping the WFA for all pensioners' so unfortunately logic goes out the window and we get unfairness.

I thought along much the same lines myself.

I would also have thought, in the long term, simply "scrapping the WFA" in that context would be more politically expedient.  The "withdrawn for all but those receiving PC" means that WFA continues to be a "thing" whereas if it ceased to exist, it would be faded in the phsyche before the next election.

MetaPhysical

No.  Some benefits should be universal.  Of course you can quote the millionaire getting the WFA. Folks always quote the extremes.  The reality is that the vast majority of older people, who need the heating on more, need the WFA and deserve it and have earned it.  A cronic error of judgement by RR.

zagfles

Nebulous2 said:

Pensioners are a powerful lobby group, and they vote in big numbers. There's an article in the independent saying that a lot of new Labour MPs have been shocked at how many letters and complaints they've had about stopping winter fuel allowance. There are likely to be further tax rises /  cuts in the budget, so it will  be interesting to see if cracks appear in their resolve to see their plans through. 

I suspect there'll be some sort of minor compensation for pensioners at the budget. They're going to have an issue anyway in a couple of years where the full NSP will exceed the personal allowance. I don't think they'll allow that to happen, the headlines wouldn't be worth it. Like "peanuts" when the state pension only increased very slightly when inflation was low so they introduced the non-sensical underpin of 2.5%

But they'll probably persist with the freeze in personal allowances, perhaps cutting NI further to encourage work so workers are partly compensated for fiscal drag, and reintroduce a pensioner's additional tax allowance so pensioners are partly protected. They could use this to subsume the savings starting rate. Eg introduce a £1000 pensioner's tax allowance and cut the saving starting rate by £1000, then index link it while reducing the starting rate. 

GibbsRule_No3.

 
Jude57 said:

I'm one of those @Silvertabby refers to. I'm a WASPI woman who had always worked full time and, for a time, was able to contribute to an occupational pension scheme. The plan was to go part-time at 60, taking my small pension to supplement my income until State Pension age of 65. However, I had to give up work at 58 due to ill health and was fortunate enough to be able to claim my small occupational pension at the time due to a change in the rules, but I did lose some entitlement by taking my pension early. I've been through all the hoops to claim disability benefits and finally gave up because the stress of doing so was affecting my health even more. I currently receive Council Tax Reduction but no other benefits. I've become used to scraping by, budget extremely carefully and accept that discretionary spending such as clothing, hairdressing, holidays, TV subscriptions, etc are no longer possible.

I used to receive the Warm Home Discount of £140 per year due to meeting the criteria for the wider group (low income) and it made such a difference to whether I could manage to heat my rented, fuel inefficient home. Then the government changed the rules and I no longer qualified, just in time for the massive increases in fuel costs. I'll receive my State Pension next year, a year later than I was originally promised, will become a taxpayer again, lose my Council Tax Reduction and now I'm to lose the £200 WFA. My 'comfortable' retirement that I planned and paid for during my working years is disappearing, bit by bit and I can only hope that the threatened huge increases in social housing rents don't push me and many like me into having to make the real choice between rent, heating or food. 

Hey Jude (sorry could not resist, Ted Lasso fan here)

Have you looked at the websites where you can check if you are eligible for any benefits, housing in particular?  I am also in Social Housing and have always thought, that due to private pensions, like you I have worked all my life since leaving school in 1971 at 17, on Tuesday I start my 54 year, granted I only do 16 hours a week now. At present due to work I am not eligible to anything but when I put my details in minus the monthly pay, it tells me I would get £30 towards my rent weekly! At present my State Pension is less than my rent and council tax, due to the rises recently but I did think the private pensions would mean nothing in benefits, seems I might have been wrong. So do a check, it won’t give either of us access to WFA but would ease my mind over rent in future when I will have to give up work.

begbeer

the most sensible solution would be to pay WFA to all basic rate taxpayers and those who do not pay tax, 

hugheskevi

begbeer said:

the most sensible solution would be to pay WFA to all basic rate taxpayers and those who do not pay tax, 

It would be sensible to follow the flawed Child Benefit model?

So a household with 2 pensioners both with an income of £50,000 get full Winter Fuel Payment, whilst next door with one pensioner with an income of £52,000 and their partner with an income of £15,000 qualify for a lower Winter Fuel Payment? And eligibility can be manipulated by pension contributions or charitable donations for those close to the threshold.

If we were going to use the tax system to determine eligibility, wouldn't it be easier to have slightly different rates for income tax for pensioners than to have a whole separate benefit designed to have the same effect as having slightly different tax rates?

The country needs to become better at designing and maintaining simple, efficient, and appropriate systems - we still have the Christmas Bonus of £10, which was introduced in 1972 and has been frozen at the same amount during my entire life. Same with the 25p age addition, introduced in 1971, which will still be around until the last recipient of old State Pension dies around 2060.

Today the Winter Fuel Payment is at similar rates to what was paid in 2003/04, because every government has felt political pressure to commit to retaining it, so it is left withering in real terms.

The only reason anachronisms such as these exist are the howls of protest whenever anything is removed from pensioners, regardless of how much gets given to them in other benefits such as State Pension.

zagfles

hugheskevi said:

begbeer said:

the most sensible solution would be to pay WFA to all basic rate taxpayers and those who do not pay tax, 

It would be sensible to follow the flawed Child Benefit model?

So a household with 2 pensioners both with an income of £50,000 get full Winter Fuel Payment, whilst next door with one pensioner with an income of £52,000 and their partner with an income of £15,000 qualify for a lower Winter Fuel Payment? And eligibility can be manipulated by pension contributions or charitable donations for those close to the threshold.

If we were going to use the tax system to determine eligibility, wouldn't it be easier to have slightly different rates for income tax for pensioners than to have a whole separate benefit designed to have the same effect as having slightly different tax rates?

The country needs to become better at designing and maintaining simple, efficient, and appropriate systems - we still have the Christmas Bonus of £10, which was introduced in 1972 and has been frozen at the same amount during my entire life. Same with the 25p age addition, introduced in 1971, which will still be around until the last recipient of old State Pension dies around 2060.

Today the Winter Fuel Payment is at similar rates to what was paid in 2003/04, because every government has felt political pressure to commit to retaining it, so it is left withering in real terms.

The only reason anachronisms such as these exist are the howls of protest whenever anything is removed from pensioners, regardless of how much gets given to them in other benefits such as State Pension.

It's all politics, not sensible fiscal strategy. And it's not just pensioner taxation/benefits. 

The "flawed" child benefit model was actually a political masterstroke. At a time of so called "austerity", the govt had to show it was hitting those on higher incomes as well as lower. "We're all in it together". Polling at the time showed the child benefit policy was massively popular, something like 80% support. The unfair anomaly (2 single earners on £50k vs one on £60k) made sure a massively popular policy was kept in the headlines by people whinging about it. All those on low incomes would have heard is "rich whinging about losing benefits, diddums". 

It's like the ridiculous personal allowance taper at £100k. It's completely equivalent to a 60% tax band between £100,000 and £125,140. So why not just have a 60% band there and incorporate that into PAYE etc instead of the complication of tapering the PA? Again, politics. They want to say the top rate of tax is 45%. And it would make the so-called "progressive" tax system look stupid to have marginal rates of tax going up to 60% then down to 40/45%. 

Eldi_Dos

westv said:

I imagine the WFA would be just a bit of loose change for most on here. 

Which makes it puzzling why some get hot under the collar about it.

zagfles

Eldi_Dos said:

westv said:

I imagine the WFA would be just a bit of loose change for most on here. 

Which makes it puzzling why some get hot under the collar about it.

Probably because
a) for some here it is significant and
b) some people think about others who are less fortunate than themselves

molerat

The simplest long term method would be to make all benefits, including the BIK received when on pension credit etc, taxable.  Fairness all round.  Would need a big change to bring DWP etc into the PAYE system but it could be done if their was a will.