Winter fuel allowance for pensioners re-instated 🤗

Grumpy_chap

JoeCrystal said:

Yes, that is how it will work. The pensioner earning £30k will be able to keep it. Again. Extremely generous.

Will it be earnings or income that sets the threshold?

If one low-income and one higher-income couple in a household can still receive the allowance, that will be a different logic to HICBIC.

Will capital be taken into account, or only income?  I can see some that might exceed the threshold drawing more pension one year and then less the next to maximise the number of years that income is below the threshold.

It seems to be a brand new threshold introduced that is not in place for any other purpose.

How wonderful that such a simple scheme as was previously has now been adapted to add an extra layer of complexity to everything.

Stubod

Can't understand why they think people earning £35k need a Winter fuel payment...

Yes, means testing it is the right idea, but I would have though a much lower threshold would have been more appropriate???

JoeCrystal

Grumpy_chap said:

JoeCrystal said:

Yes, that is how it will work. The pensioner earning £30k will be able to keep it. Again. Extremely generous.

Will it be earnings or income that sets the threshold?

If one low-income and one higher-income couple in a household can still receive the allowance, that will be a different logic to HICBIC.

Will capital be taken into account, or only income?  I can see some that might exceed the threshold drawing more pension one year and then less the next to maximise the number of years that income is below the threshold.

It seems to be a brand new threshold introduced that is not in place for any other purpose.

How wonderful that such a simple scheme as was previously has now been adapted to add an extra layer of complexity to everything.

Incomes as far as I can see. Capitals are not taken into account. The threshold is set so middle-income pensioners will not miss out. It is to ensure that about 3 in 4 of the pensioners get to keep the Winter Fuel Payment. In other words, if you are a pensioner with an income above £35k, you are already within the top 25%

Personally, I would set the threshold much lower to cover between a third of the pensioners or slightly higher. The bell curve would be much more skewed towards the lower end of the income.

ali_bear

It was obviously easier to pay it to all pensioners, but this was costly. They brought in means testing but many were apparently unhappy that they were not sufficiently poor to get it anymore. So now they are making it more widely paid. Probably Goldilocks won't be happy with this either. 

I would much rather they brought children out of poverty. But now we are in danger of being political. 

hugheskevi

Stubod said:

Can't understand why they think people earning £35k need a Winter fuel payment...

Yes, means testing it is the right idea, but I would have though a much lower threshold would have been more appropriate???

Fairly standard to initially set a threshold at a high level on introduction so as to make the noise go away as relatively few will now be affected. As long as people themselves are not made worse off, they tend to agree that a measure is 'fair' regardless of the principles and arguments around a policy, and so setting the level where a clear majority are not made worse off means a clear majority will say the government is now being 'fair.' [fair being very subjective and hence usually meaningless argument, but a word that is always rolled out in defence of a policy]

This situation is a bit tricky, as there will be many pensioner households with a low income and much higher income person (typically a female with an income of little more than basic state pension, and a male with a decent State and occupational pension). If that were something like £10,000 for the female and £30,000 for the male, both would probably oppose an income threshold of £25,000 despite one of them being unaffected.

Leave both the cash entitlement and income threshold frozen in cash terms and let inflation erode them over time, eg, 25p age addition for over 80s and income tax thresholds. A small number lose their entitlement each year, but due to their number their voices will not be loud enough to cause a problem, particularly in the early days when the pleas of a pensioner with a taxable income of £35K+ for more of a govt handout will not be met with much sympathy. Within a few years it will all be accepted as the new normal.

If feeling bold, reduce threshold slightly in future, which will only attract protest from a much smaller number in the newly affected population, eg, Lifetime Allowance and Annual Allowance.

GMeeg

Many pensioners will also own homes outright and probably maxed out ISAs to get tax free income which presumably doesn't count. Lots of  families with mortgages and much less than £70k income who would welcome the help.

westv

It should be set above £90k earnings otherwise they will all FREEZE!!! 

IvanOpinion

Give the state pension a one off boost of about 2-2.5% and do away with winter fuel allowance totally.
Fund it through NI payments for higher earning pensioners.

MTB1986

ali_bear said:

What is the situation for those that have a measly 34k of pension income but large savings? 

I wouldn’t call 34k income measly…

Cobbler_tone

So a joint income of £69,999 both could get it, whilst a couple with £35,001 and one could get it.
A bit of deja vu with the child benefit.
They have to set the limits somewhere though and seems that 'most' will now be re-instated.
It had to be simple though. Can you imagine the amount of resources needed to fully administer something with a complex means testing approach? I don't get the impression that the departments use cutting edge AI to administer these things.
Love a good u-turn! The folks will have a bit more cash to give to the grandkids but I am sure that it will be absolutely huge for those who genuinely need it.