Letter to the Chancellor of the Exchequer: Winter Fuel Allowance

Letter to the Chancellor of the Exchequer

Winter Fuel Allowance

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24th September 2024 Dear Rt Hon Rachel Reeves MP,  I wholly support that the winter fuel allowance benefit must be means tested, and I also fully understand and agree that tough decisions are required in respect to the economy, but I am also of the very strong view that the qualification threshold being set for the winter fuel allowance is far too low, and further, I feel there is substantial evidence that supports this. I am of the firm belief that setting the qualification threshold at pension credit could disadvantage those most vulnerable, who for reasons beyond their own control do not 

qualify. I would therefore respectfully request that the Treasury consider the following options for the setting of the threshold at a controllable, higher level:

          1. Alternative Option 1 – the threshold is set that any pensioner who pays the higher rate of tax (40% and above) does not receive the benefit, and anyone below does. My understanding is that HMRC could automatically discount these individuals through tax returns/tax receipts as this is fully automated already. This would ensure that all pensioners paying either no tax, or the lower rate of tax, would continue to qualify; these being the most vulnerable that require the winter fuel allowance supplement.

          2. Alternative Option 2 – the threshold is manually set on the single or joint income of the individuals, say £40,000 per couple or £25,000 for a single household. The winter fuel payment is still not paid to any individual on the higher rate of tax, and for those in receipt who do not qualify within these criteria, is recovered retrospectively via either (1) annual tax coding changes, or (2) via individual tax returns (for those pensioners that complete them), along the lines of how child benefit is recovered.

In order to cover any additional cost to the exchequer for the above options being implemented, the Treasury could consider a small additional levy on the utility (power) companies to cover the cost, for the entire winter fuel allowance payments. 

I believe that both the options above are much fairer and fully protect those on low incomes, and would appreciate a meeting with your team to discuss further.

Yours Sincerely,

Paul Foster 

Member of Parliament for South Ribble

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