asked Her Majesty’s Government:

What saving to the Exchequer would result if the winter fuel payment to pensioners were made taxable to those pensioners whose income places them in the 40 per cent tax bracket; and how much the payment could be increased for all pensioners from that saving. [HL594]

Winter fuel payments are worth £200 to households with someone aged 60 or over and £300 to households with someone aged 80 or over. Estimates suggest that taxing winter fuel payments for higher rate taxpayers would raise revenue of around £80 million. This would represent an increase of around £9.40 for each of the 8.5 million households that receive winter fuel payments.

The estimation of revenue raised excludes those in residential care and relies on a number of simplifying assumptions such as 100 per cent take-up of winter fuel payments and no behavioural change. Taxing winter fuel payments for higher rate taxpayers would be administratively complicated, and this administrative cost is also not taken into account.