The Spending Plan policy 5: means test winter fuel payments
Each day we are publishing a blog on one of the policies from our Spending Plan. Click here to read the previous policy.
The winter fuel payment is a tax-free annual payment to eligible pensioners. It is a cash payment that recipients can spend on whatever they please.
All recipients of pension credit (guarantee credit) would continue to receive the payment in full under this policy. In 2015–16 this would mean the poorest 17 per cent of pensioners receive the full payment. The payments range from £100 to £300 per annum so £200 has been used to calculate savings.
Pensioners with weekly income above the guarantee credit (£148.35 in 2014–15) will have the payment withdrawn so that only pensioners in the bottom third of the income distribution will receive winter fuel payments. The estimated spending on those who earn more than the guarantee credit level was calculated by subtracting the pension credit caseload from the bottom third of pensioners and multiplying the result by an assumed £100 each.
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