Changes to Winter Fuel Payments : Social Fund Winter Fuel Payment Regulations 2024
This briefing looks at the Social Fund Winter Fuel Payment Regulations 2024. These regulations will introduce means testing for winter fuel payments. They are the subject of a motion by Baroness Altman (non-affiliated) to quash them. The House of Lords Secondary Legislation Scrutiny Committee has also drawn special attention to the rules of the House.
Baroness Altman (Non-affiliated) moves that a humble address be presented to Her Excellency praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, be repealed because It will reduce significantly. State support for pensioners without adequate warning and without proper impact assessment, and because they present a significant risk to the health and well-being of many low-income pensioners.
01. Summary of Proposed Changes
The Government has announced changes to winter fuel payments to be implemented in the Social Fund Winter Fuel Payment Regulations 2024. The government wants to mean-test the payments. People who do not receive pension credit or “certain other means-tested benefits” will no longer receive winter fuel payments. Since 1998 everyone has been paid into receipt of the state pension, regardless of their other income. The government has said that some difficult decisions have had to be made “to fix the foundations of the economy due to the deteriorating state of public finances”.
An explanatory memorandum to the rules states that the government expects to make savings of £1.3bn in 2024/25 and around £1.5bn in subsequent years as a result of the policy.
The House of Lords Secondary Legislation Scrutiny Committee said the Department for Work and Pensions (DWP) told it the policy would mean 9.3 million fewer people would claim the payment in 2024-25:
In supplementary material, the Department for Work and Pensions (DWP) told us that the estimated number of claimants in England and Wales for 2024-25 is expected to be 1.5 million individuals in 1.3 million households. This represents a decrease of 9.3 million individuals from 7.6 million households claiming in 2023-24 and 10.8 million individuals to 6.3 million households.
The government has started efforts to get pension credit taken by those who qualify for pension credit so that they can also get winter fuel payments. It also announced funding to expand the Household Support Fund, which will “enable local authorities in England to help vulnerable people and families access discretionary emergency support as we help people through the winter”.
02. Announcement of changes to winter fuel payments
On 29 July 2024, the Chancellor of the Exchequer, Rachel Reeves, made an oral statement in the House of Commons on public spending. She accused the previous Conservative government of “covering up” the state of the UK’s public finances. She said she was told by officials that the day-to-day spending set out in the spring budget in March 2024 did not reflect what the then government expected to spend this year. She said this amounts to a £22bn overspend on public money:
Once we account for the slippage in the budget that we typically see in a year and the £9bn of reserves designed to respond to truly unexpected events, that means we’ve inherited an estimated overspend of £22bn. That is now a £22bn hole in the public purse—not in the future, but now. This year’s spending is £22bn which was covered by the Conservative Party. If left unaddressed, it will mean a 25% increase in the budget deficit this year, so today I will set out the necessary and urgent work that I have already done to reduce the pressure on the public purse by £5.5bn this year and beyond. is £8bn next year.
As part of the government’s response, the chancellor announced that people not receiving pension credit or “certain other means-tested benefits” would no longer receive winter fuel payments. People in receipt of pension credit will continue to receive a winter fuel payment of £200 or a credit of £300 where someone is over 80. Incredibly Tough Choices”. She said it was not a decision she wanted to make:
Or it is not what I expected, but these are necessary and urgent decisions that I must make. It is the responsible thing to fix the foundations of our economy and bring back economic stability.
The chancellor said she would work with the secretary of state for work and pensions “to maximize the use of pension credit by bringing forward the administration of housing benefit and pension credit”, along with changes to winter fuel payments. The Government will also work with older people’s charities and local authorities to raise awareness of Pension Credit.
The Shadow Chancellor, Jeremy Hunt, responded to the protest. He said Rachel Reeves “wouldn’t fool anyone with a shameless attempt to lay the groundwork for a tax increase that she didn’t have the guts to tell us about”. He said a recent audit of public finances by the Office for Budget Responsibility (OBR):
Those public finances were audited by the OBR just 10 weeks before the election was called. Now we believe that, in that short period, a £20bn black hole has magically emerged, but for every single day in that period – in fact, since January, corresponding to the Constitutional Convention – the right hon. Lady had privileged access to the Treasury Permanent Secretary. She could have found anything she wanted.
Paul Johnson, director of the Institute for Fiscal Studies, argued that “it was always clear and obvious that the spending plans inherited by the incoming Labor government were “inconsistent” with its plans for public services and that at some point more funding would have been needed. However, he Said the lack of funds in the year will add to the problem:
But the extent of funding pressures in the year actually appears to be greater than might be known from the outside, which only adds to the scale of the problem.
He described some of the specifics as “really shocking” and argued that they raised “some difficult questions for the last government”.
03. Parliamentary Scrutiny of Social Fund Winter Fuel Payment Regulations 2024
The House of Lords Secondary Legislation Scrutiny Committee (SLSC) considers the policy merits, both negative and positive, of regulations and other types of secondary legislation subject to parliamentary procedure.
The SLSC has drawn the Social Fund Winter Fuel Payment Regulations 2024 for the special attention of the House.
We are unconvinced by the reasons given for the urgency of putting these regulations in place and are particularly concerned that they both prevent proper scrutiny and raise problems with the practicality of making changes at short notice.
In its report, the SLSC raised concerns over a number of issues raised by the policy. This includes:
Impact on pensioners not claiming pension credit to which they were entitled. The committee said the group of low-income pensioner households was potentially “much larger than those claiming benefits alone”. The committee said it was unclear whether the DWP had assessed the risk that the rules could “cause potential inequalities. between pensioners with income less than and pensioners with less income not claiming benefits”.
Estimates of the additional costs of more people taking Pension Credit. The committee said the DWP had told it its projections for the number of winter fuel payment claimants for 2024-25 assumed a five percentage point increase in getting pension credit. The government was going to bring together the administration of pension credit and housing benefit “so that pensioner families receiving housing benefit also get the pension credit to which they are entitled”. The committee welcomed the initiative and the drive to increase pension credit but said the home government wanted to ask That “what the cost (including administrative costs) of the estimated additional five percentage points in pension credit is expected to be”.
A brief notice given to introduce the policy. The committee referred to press reporting which said that processing a claim for pension credit could take up to nine weeks. The committee said the DWP had told it claims for pension credit could be backdated by up to three months and that “2024-25 is the latest a successful backdated claim [for pension credit] can be to qualify for the winter fuel payment. So 21 December”. The committee said it wanted to ask the Home Government whether this would give claimants assurance that their winter fuel would be paid “so that they feel confident of keeping the heating on if needed”.
The energy regulator, Ofgem, has announced that electricity and gas costs for the average household will rise by £149 per year from 1 October to 31 December 2024, a 10% increase. The SLSC said the House wanted to ask the Government whether it had considered the impact of changes in winter fuel payments and the increase in energy costs occurring at the same time. The committee also noted that more pensioners also have to pay income tax as personal tax allowances continue to be frozen.
The SLSC said it was generally considered that the implementation of “major policy changes” during the parliamentary recess was “poor practice”. An explanatory memorandum to the regulations stated that the regulations were enacted during the summer recess as they had a ‘qualifying week’. The first day was required to come into effect, which would be 16 September 2024. Between 16 and 22 September 2024, depending on when a person was born and their circumstances, is called the ‘qualifying week’. The Explanatory Memorandum stated that unless the previous rules were repealed by 16 September 2024, the new rules could not repeal them. The SLSC questioned whether it would be “possible to delay or remove the current trigger date and introduce a replacement scheme at a later date, allowing more time for scrutiny in Parliament and elsewhere”.
The SLSC also expressed concern that the timeline for vetting the rules has implications for the Social Security Advisory Committee (SSAC):
All benefit regulations are required by law to be considered by the Independent Social Security Advisory Committee (SSAC). This is usually done before legislation is enacted. In this case, the Minister has opted for an urgency provision that allows the SSAC’s consideration to be retrospective. This could be seen as bypassing SSAC scrutiny, so we asked the DWP what impact, if any, that committee’s adverse report would have on the regulations once they come into force. The DWP responded that, in line with their legal duty, Ministers would lay a report before Parliament.
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