Winter fuel allowance for pensioners re-instated 🤗

molerat

Ayr_Rage said:

Don't forget those of us in Jockland will get something different!

Can't Count Kate has been given the equivalent costing but is whining because she wasn't consulted on an E&W only matter as it is now a devolved benefit.

Hoenir

slinger2 said:

So non-ISA interest from savings accounts will be included in the £35k limit, but ISA interest won't? Might be an incentive for those near the £35k mark to have their savings in an ISA, even if they're under the limit where they'd pay tax on that interest (£1k for many of us).

Cash ISA's are in the firing line. There's never any free lunches. Giveaways have to funded. There's little margin with the Government finances. 

Like wise the WFA can be allowed to erode with inflation........

Cobbler_tone

I think the main takeaway is that those who need it most are going to get it. Good news day, especially when any government admits they got something very wrong.

ukdw

Sterlingtimes said:

I contrive to keep my pension income below £50,270 so that I do not lose the Marriage Allowance that my wife transferred to me. If I fail to opt out, does the Winter Fuel Allowance increase my income? Is this a situation where opting out may be preferable?

I suspect there are going to be quite a few complications when incomes are close to £35k, £50,270 and £100k.

I wonder how they are going to know whether to take off the £100 or not, plus how they are going to know whether you have opted out or not.

Also if one person in a couple is below £35k I presume you can't half opt out.

If the allowance is say £100 per person - are they going to lower tax code by £500 to recover it if you are between £35k and £50k - but what will they do if you are near to £50,270 or above it?

Also does a £500 reduction in tax allowance mean to avoid paying 40% tax you might need to reduce income down to £49,770?

Also what happens is one person in a couple (maybe the below £35k one) is above state pension age and the > £35k earner is below state pension age -   will the non pensioner have to pay more tax?

I think it would have been easier to just tax it like normal income - maybe increasing the amount by 25% to give people less than £35k the full amount. That way it could have just been a one off uplift to the state pension.

Snowdrop08

What about multiple couple households? Anyone any idea? Say, with one pensioner on more than £35k?

Dazed_and_C0nfused

Snowdrop08 said:

What about multiple couple households? Anyone any idea? Say, with one pensioner on more than £35k?

The official announcement on gov.uk states this,

The payment will be recovered from individuals via HMRC based on their individual taxable incomes. There will be no need for household incomes to be aggregated.

LHW99

Dazed_and_C0nfused said:

Snowdrop08 said:

What about multiple couple households? Anyone any idea? Say, with one pensioner on more than £35k?

The official announcement on gov.uk states this,

The payment will be recovered from individuals via HMRC based on their individual taxable incomes. There will be no need for household incomes to be aggregated.

Hopefully that means that Steve Webb speaking to This is Money is wrong when he says:

"But as This is Money's pensions columnist Steve Webb points out, each member of a couple over pension age in effect gets £100 each in WFP.

That means the person declaring income of £35,000 or above will presumably be taxed on £200 – in other words, on their spouse’s income as well as their own."

https://www.thisismoney.co.uk/money/pensions/article-14793869/U-turn-Winter-Fuel-Payment-You-income-35-000.html

Dazed_and_C0nfused

LHW99 said:

Dazed_and_C0nfused said:

Snowdrop08 said:

What about multiple couple households? Anyone any idea? Say, with one pensioner on more than £35k?

The official announcement on gov.uk states this,

The payment will be recovered from individuals via HMRC based on their individual taxable incomes. There will be no need for household incomes to be aggregated.

Hopefully that means that Steve Webb speaking to This is Money is wrong when he says:

"But as This is Money's pensions columnist Steve Webb points out, each member of a couple over pension age in effect gets £100 each in WFP.

That means the person declaring income of £35,000 or above will presumably be taxed on £200 – in other words, on their spouse’s income as well as their own."

https://www.thisismoney.co.uk/money/pensions/article-14793869/U-turn-Winter-Fuel-Payment-You-income-35-000.html

That comment doesn't seem to tally with the official announcement.

And he also supposedly said this, leaving all those people with income of £35,000 in limbo!

Former Pensions Minister Steve Webb said the new policy looks like it will create a cliff edge - £1 below £35,000 per year and you get the full benefit, £1 above and you lose £200

sheramber

Freecall said:

eltisley98 said:

I consider having to fill a tax return just so that the government can claw back £200 to be "extensive and expensive bureaucracy". Having to answer one more question on the tax return, e.g., your total household income? Not much. 

That won't be required as it is an individual benefit (the days of one member of a household being responsible for obtaining that information from the other is long gone!).

Somehow though HMRC will need to know if people are living alone as that will double the benefit.  They will also need to know the age of other members of the household I guess.

That could be a question on the tax return but Rachel from accounts has said that unless you already complete a tax return, folks won't have to start.

The previous system knew  how many people in a household got the payment.

Under 80

One person receiving state pension got £200

Two people in the household getting state pension each got £100.

A friend got £200 each year until her husband reached state pension age then they got £100 each.

I expect state pension payments are linked by addresses.

The maximum payment is per household. one eligible person gets it all, two eligible people get half each.

dosh37

After reading Martin Lewis explanation of the rules, I removed some of my initial questions.

One question remains:-

Does means tested income include dividends?

If someone is close to the threshold, then they lose the payment completely if their income is just £1 over the limit. It may make sense to take out some savings to ensure the interest does not push the total income above the £35K limit.