A new IFS briefing considers the options for how to expand
entitlement to winter fuel payment. The government previously
chose to restrict eligibility to only those receiving pension
credit. It could choose to restrict eligibility based on the
receipt of other benefits, such as housing benefit and disability
benefits. Unless it wants to create a whole new administrative
system, the only other option for means-testing WFP is to do it
through the income tax system.
This briefing considers how many pensioner households would be
(in)eligible given different income thresholds, and how much
would be saved compared with returning to universal entitlement
for pensioners. The key issue that the government faces is that
if they introduce a means-test which only keeps high-income
pensioners ineligible, then they save relatively little for the
exchequer compared to returning to universal entitlement (for
example, saving around £200 million per year if the threshold is
set at the income tax higher rate threshold). But there would be
significant administrative and hassle costs of such a system.
READ THE FULL BRIEFING
HERE.
Jonathan Cribb, Associate Director at IFS,
said:
“If the government wants to re-extend entitlement to winter fuel
payment to many pensioners, but still prevent it being paid to
high-income pensioners, they will end up making only small
savings compared to returning to universal entitlement. Those
small savings would need to be balanced against the
administrative and hassle costs (for government and for
pensioners) of operationalising and interacting with a new
means-test.”
ENDS
Notes to Editor
Expanding eligibility for the
winter fuel payment is an IFS briefing by
Jonathan Cribb.
You can read the briefing on the IFS website here: https://ifs.org.uk/articles/expanding-eligibility-winter-fuel-payment
