Winter Fuel Payment - To be or Not to be?

ElectricBeagle

Hi itsthelittlethings. Thanks for replying.  Straight to the point and on the money! Yes, I was uncertain and didn’t have confidence, but that seems to be exactly the right answer. It just feels wrong to discount PIP as an income as you receive it from the state, even though you could be a lottery winner and still be entitled to it. 

Spoonie_Turtle

ElectricBeagle said:

As a general rule, and only considering Tax and Benefits, if asked “What is you annual income?”, and she receives and pays Herself from savings the following, what would the answer be?

Rough example: 
State Pension: £8000 a year.
PIP: £7500 a year 
Savings: £8000 a year (this she pays herself from savings and is exactly the equivalent of the Pension Credit she lost.

On the above example, and only for tax and benefits purposes, what should she say her income is?

For tax purposes, her State Pension and any taxable interest from savings.

For means-tested benefits, State Pension is income and she would declare her savings as capital.  [The whole point of savings being taken into account is to make people use them, they wouldn't be double counted by then classing what she pays herself as income.]  I believe the interest would just be classed as more savings/capital. 

Any PIP she doesn't spend and accumulates would then become more savings, but it is not classed as income for means-tested benefits.

Dazed_and_C0nfused

ElectricBeagle said:

Hi Spoonie-Turtle. Thanks for replying and Good afternoon. Yes, you’re 100% correct concerning the Pension Credit amounts. I only put the £16,000 figure, as at the time that was the limit to receive the benefit at all after you take one pound off for every certain amount you have saved. 

That’s great to know about the PIP and Savings she pays herself being “not taxable income”. 

Yes, very true. It is worth checking annually the eligibility calculator. I didn’t occur to me that the threshold would change. It is also a challenge in that the threshold for Pension Credit that disqualified her for the Winter Fuel payment (at that time) is different to the new £35,000 income threshold that does make her eligible to receive it. So now, she is not eligible to receive PC but is entitled to receive the WFP, which she was not entitled to two years ago. 

As a general rule, and only considering Tax and Benefits, if asked “What is you annual income?”, and she receives and pays Herself from savings the following, what would the answer be?

Rough example: 
State Pension: £8000 a year.
PIP: £7500 a year 
Savings: £8000 a year (this she pays herself from savings and is exactly the equivalent of the Pension Credit she lost.

On the above example, and only for tax and benefits purposes, what should she say her income is?

For tax purposes (including WFP payback) it's £8,000 plus the interest you have overlooked.

No idea for benefits purposes but I suspect the £8,000 taken from savings is an "income" concept most people simply don't have.  DWP included I suspect.

ElectricBeagle

Thanks to everyone who replied. It really makes a huge difference in understanding exactly where one stands and what is and is not acceptable when supplying answers on forms. I would have wrongly assumed last year that PIP was considered income. I’ve gradually come to understand it is not, however it still feels odd to exclude it. The main reason for my questions and the whole Post was a fear of accepting something which I wrongly believed she was not entitled to (this year) based on previous years and then getting a letter sometime down the road stating she owes the DWP money. Thank you. You’ve put my fears to rest.

Dazed_and_C0nfused

ElectricBeagle said:

Thanks to everyone who replied. It really makes a huge difference in understanding exactly where one stands and what is and is not acceptable when supplying answers on forms. I would have wrongly assumed last year that PIP was considered income. I’ve gradually come to understand it is not, however it still feels odd to exclude it. The main reason for my questions and the whole Post was a fear of accepting something which I wrongly believed she was not entitled to (this year) based on previous years and then getting a letter sometime down the road stating she owes the DWP money. Thank you. You’ve put my fears to rest.

Personally I would say PIP is income, but not for tax purposes (or WFP payback).

As long she is entitled to the WFP then I cannot see any comeback from DWP.

But if she was entitled to it and had high taxable income (>£35,000.00) HMRC would be asking her to pay it back.

ElectricBeagle

Dazed_and_C0nfused said:

ElectricBeagle said:

Thanks to everyone who replied. It really makes a huge difference in understanding exactly where one stands and what is and is not acceptable when supplying answers on forms. I would have wrongly assumed last year that PIP was considered income. I’ve gradually come to understand it is not, however it still feels odd to exclude it. The main reason for my questions and the whole Post was a fear of accepting something which I wrongly believed she was not entitled to (this year) based on previous years and then getting a letter sometime down the road stating she owes the DWP money. Thank you. You’ve put my fears to rest.

Personally I would say PIP is income, but not for tax purposes (or WFP payback).

As long she is entitled to the WFP then I cannot see any comeback from DWP.

But if she was entitled to it and had high taxable income (>£35,000.00) HMRC would be asking her to pay it back.

Yes, I feel the same concerning your PIP comment, but as a whole I am confident her annual income doesn’t not exceed (even come close to) £35,000. Her tax accountant two years ago stated her Pension was her only income. From yours and my perspective, I would have thought her State Pension and PIP was her only income. However, talking casually outside of Tax and Benefits, she obviously pays herself an income to maintain the quality of life that she was on when receiving Pension Credit top up. She wasn’t entitled to WFP two years ago, because she lost her Pension Credit, because her savings exceeded £16,000. Now she still is not entitled to PC, but is entitled to the WFP. I’m not ungrateful and very pleased that many pensioners who really need the WFP will now get it, but the goal posts seem to be on permanent wheels that are forever moving! 

sheramber

The government restricted the winter fuel payment  to those receiving PC and other benefits in July 24. 

Before that there was no restriction. The payments were made to all those who had reached the relevant age.
This was applied for 24/25. 

There was a public outcry about the restrictionsi
Imposed  and the government climbed down  and changed the rules again, to remove that restriction but apply a taxable income limit of £35,000  on being eligible. 

This applies to 25/26  onwards until the government decide to change it again.