The new Labour Party government will impose a Winter Fuel Payment which will cost the taxpayer nearly £400m. Labour’s decision to means-test Winter Fuel Payments for millions of pensioners has already cost taxpayers £380million following a surge in benefits claims.
Data shows the subsequent surge in Pension Credit claims has already significantly eroded the projected savings. The Department for Work and Pensions ( DWP ) anticipated the surge in applications would cost £370million annually after it opted to means-test £300 Winter Fuel Allowances.
But analysts at Policy in Practice said Labour Party government had not accounted for “passported benefits” linked to Pension Credit, such as council tax support and free prescriptions. Sir Steve Webb warned: “There is no doubt that the surge in applications for Pension Credit will reduce the savings from this policy, potentially costing the Government more than £200million per year in benefits for pensioners.”
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Sadow Chancellor Mel Stride said: “Labour’s approach to the increased poverty they are creating is to encourage more pensioners to apply for Pension Credit. But that is substantially eroding the savings.” He told The Telegraph newspaper: “Means testing the winter fuel payment is a dreadful decision.”
“The Government’s own figures show that it will mean tens of thousands of pensioners being plunged into poverty,” Conservative Party MP Mr Stride added. “Means testing the Winter Fuel Payment is a dreadful decision. The Government’s own figures show that it will mean tens of thousands of pensioners being plunged into poverty,” Stride added. He also warned that if all entitled pensioners claimed the benefit, the extra costs would “outweigh the savings”.
“The dreadful irony is that in fiscal terms, the Government is actually working against itself by attempting to soften the cruelty of this misguided policy,” he went on to say.A DWP spokesman said: “Over one million pensioners will still receive the winter fuel payment, and our drive to boost Pension Credit take-up has seen applications more than double with over 40,000 more pensioners now receiving it, as well as the winter fuel payment.”