WFP fleshed out. who will qualify and who will have to pay it back.

born_again

https://www.bbc.co.uk/news/live/c5yxvdl4d0pt

• The payment, worth up to £300, will still be given to pensioners with income above the £35,000 threshold, but will then be reclaimed from them

Seems a strange decision to pay & then claim back...


We'd like to remind Forumites to please avoid political debate 

Spoonie_Turtle

See also:  https://www.gov.uk/government/news/nine-million-pensioners-to-receive-winter-fuel-payments-this-winter

Not wanting to be political, I'm just confused by this statement: "This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million"

Is anyone able to (neutrally) shed light on how those two seemingly contradictory figures make sense?

(But I guess that's not exactly relevant so if members decide it's not worth answering, I understand.  I just like to have my facts straight when taking in new information.)

sheramber

Payment made by DWP but reclaimed by HMRC where appropriate.

 The same as Child Benefit. 

Muttleythefrog

Spoonie_Turtle said:

See also:  https://www.gov.uk/government/news/nine-million-pensioners-to-receive-winter-fuel-payments-this-winter

Not wanting to be political, I'm just confused by this statement: "This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million"

Is anyone able to (neutrally) shed light on how those two seemingly contradictory figures make sense?

(But I guess that's not exactly relevant so if members decide it's not worth answering, I understand.  I just like to have my facts straight when taking in new information.)

Presumable they mean the changed policy will increase costs that much from the previous position of their means testing but from the universal payment consideration they'll save the latter figure. Minimal savings now.

Newcad

Spoonie_Turtle said:

Not wanting to be political, I'm just confused by this statement: "This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million"

Is anyone able to (neutrally) shed light on how those two seemingly contradictory figures make sense?

I believe it's saying two slightly different things:

1. Having the £35k threshold will cost £1.25 billion more than limiting WFP only to those on Pension Credit.
2. Having the £35k threshold will save £450 million more than having no threshold and just giving WFP to all state pensioners regardless of other income they may have.

In other words; rather than having WFP 'passported' by Pension Credit, as it was last winter, they have now made it means tested with a £35k limit. (Which will cost the treasury £1.25 Billion more for this years winter than last winters WFPs cost them).

born_again said:

Seems a strange decision to pay & then claim back...

As for the way that it's being paid and then clawed back from those with higher incomes, that's just because it's easier for it to be done that way:-

• This year, (and ongoing until they change it again), all State Pensioners will be paid the WFP - That's just to make things easy for the DWP to pay it without having to check on pensioners incomes.
• It will then be taken back by HMRC from those with an income of over £35k. - As people are already supposed to be reporting their income to HMRC then that's easier for HMRC to do.

HillStreetBlues

born_again said:

https://www.bbc.co.uk/news/live/c5yxvdl4d0pt

• The payment, worth up to £300, will still be given to pensioners with income above the £35,000 threshold, but will then be reclaimed from them

Seems a strange decision to pay & then claim back...


We'd like to remind Forumites to please avoid political debate 

It's political decision.
Rather than totally backtrack they can say it's targeted and the wealthiest pensioners won't get the WFP, even if it actually costs more overall once admin is factored in. 

Silvertabby

Just waiting to see how Mr S can 'opt out' rather than go through the faff of paying it back through tax.  My £100  will go the same way our WFA has always gone - into our supermarket local food bank box.  Yes, I know I can opt out as well, but this way the money is targeted at local people in need rather than being swallowed up.

NorthYorkie

Although the new regime is said to be 'means-tested', it isn't. The test is only by reference to a person's income. It does not take into account any capital resources they may have. Therefore a person could have savings of, say, £150,000 but a taxable income (including any taxable interest on those savings) of, say, £25,000 and still qualify for the Winter Fuel payment.

Silvertabby

NorthYorkie said:

Although the new regime is said to be 'means-tested', it isn't. The test is only by reference to a person's income. It does not take into account any capital resources they may have. Therefore a person could have savings of, say, £150,000 but a taxable income (including any taxable interest on those savings) of, say, £25,000 and still qualify for the Winter Fuel payment.

That level of means testing would probably cost more than the WFA !