Skip to main content

Benefits: Winter Fuel Payment

Volume 688: debated on Thursday 18 January 2007

asked Her Majesty's Government:

Further to the Written Answer by the Lord McKenzie of Luton on 19 December 2006 (WA 273), what savings to the Exchequer would result if the winter fuel payment to pensioners were made fully taxable; and what could be the increase in winter fuel payment for all pensioners from that saving. [HL1157]

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 making winter fuel payments fully taxable would raise revenue of around £465 million. This would represent an increase of around £55 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 would be administratively complicated, and this administrative cost is also not taken into account.