The Department for Work and Pensions (DWP) and the Labour government have introduced a new Winter Fuel Payments Charge that will see some state pensioners lose £17 per month from their income. The charge, spearheaded by Andy Burnham and John Healey, applies to pensioners born before 1960 who have a taxable income over £35,000 and are not receiving means-tested benefits.
How the Winter Fuel Payments Charge Works
HMRC will recover the Winter Fuel Payment (or Pensioner Winter Heating Payment, PAWHP) through the tax system. This is done either by adjusting pay as you earn (PAYE) tax codes or by adding the amount to self-assessment tax returns. The charge is applied to individuals, not households, meaning if only one partner in a couple earns over £35,000, only that partner's share is recovered.
HMRC's Statement on the Clawback
According to HMRC: "You'll need to wait for us to take back the payment, you cannot pay it sooner as a lump sum. We'll take back your payment for the 2025 to 2026 tax year by changing your tax code for the 2026 to 2027 tax year." This means pensioners will pay more tax each month, with a typical payment of £200 resulting in around £17 extra per month in tax.
Eligibility and Payment Details
Winter Fuel Payment is designed to help older people afford heating in winter. It is paid to those who have reached State Pension age on or before the qualifying week (the week beginning the third Monday of September) and meet other conditions, such as not being in hospital for free treatment for more than a year. Most payments are automatic in November or December.
Historical Context of Winter Fuel Payment
First introduced in 1997, the payment has varied, typically £200 for households with the oldest person under 80, and £300 for those aged 80 or over. In some years, extra amounts were added. Notably, the payment is not uprated annually for inflation in England, Wales, and Northern Ireland.
