DWP offers payment worth £812 but warns you must repay it by cut-off date

Wales Online

12 hours ago

DWP offers payment worth £812 but warns you must repay it by cut-off date
The payment is usually sent out in November or December to help with fuel costs during the colder months
The government will vote on making the Winter Fuel Payment means tested
(Image: Gareth Fuller/PA Wire )
Previously, Winter Fuel Payments were universally distributed to everyone over state pension age. However, following its election victory last year the new Labour-led UK government declared it would begin means-testing these payments, limiting them to those on benefits and Pension Credit as a cost-saving measure.
This decision was widely condemned for targeting some of the most vulnerable individuals and was believed to have contributed to the party's poor performance in the local elections.
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In recent weeks the government has partially reversed its stance, with Chancellor Rachel Reeves confirming that more pensioners will receive the Winter Fuel Allowance this year although it will not be universal. For money-saving tips, sign up to our Money newsletter here
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At a press conference, Ms Reeves told reporters that 'more people will get Winter Fuel Payment this winter' adding that further details would be announced 'as soon as we possibly can.'
What changes are being implemented under the new rules?
The modifications, officially announced on Monday, June 9, will enable all pensioners in England and Wales earning £35,000 a year or less to receive a Winter Fuel Payment.
This expands eligibility to the vast majority of pensioners, with approximately nine million or over three-quarters benefitting according to ministers.
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This change will cost around £1.25 billion in England and Wales and the Winter Fuel Payment is expected to save around £450 million compared to a universal system, subject to certification by the Office for Budget Responsibility. These figures will be reflected in the next Budget and OBR forecast.
The payment of £200 per household, or £300 for households with someone over 80, will be automatically made this winter. Over 12 million pensioners across the UK will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 during this parliament.
Chancellor Rachel Reeves said: 'Targeting Winter Fuel Payments was a tough decision but the right decision because of the inheritance we had been left by the previous government. It is also right that we continue to means-test this payment so that it is targeted and fair rather than restoring eligibility to everyone including the wealthiest.
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'But we have now acted to expand the eligibility of the Winter Fuel Payment so no pensioner on a lower income will miss out. This will mean over three-quarters of pensioners receiving the payment in England and Wales later this winter.'
Reeves elaborated further, stating that pensioners earning above the £35,000 threshold, about two million individuals, will automatically repay the Winter Fuel Payment through PAYE or their self-assessment tax return. They will not need to take any action unless they choose to opt out of receiving the payment altogether, which will be possible later this year.
Budgeting Loans
If you're applying for a Budgeting Loan, separate from the Winter Fuel Payment, this must be repaid, though it is interest-free so you only pay back what you borrow.
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The repayments are automatically taken from your benefits and the amount you repay depends on your income including any benefits and what you can afford.
After you apply, you'll get an email, text or letter telling you if you've been offered a loan and this will explain how much your weekly repayments will be if you accept it.
You normally have to repay the loan within two years (104 weeks). The maximum loan amount is £812 for a couple with children.
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