The Department for Work and Pensions (DWP) has been warned its savings from the Winter Fuel Payment cut have been “wiped out” already. The DWP and the new Labour Party government’s savings from the rule change to the £200 or £300 benefit is falling fast.
The government said the controversial change would raise £1.4bn. But research from Policy in Practice shows that the number of new Pension Credit claims meant the government had been forced to overspend on the change already, in the first week of January.
This is because the government did not factor in additional Treasury-funded support that pensioners claiming Pension Credit can access in their assessments, writes Policy in Practice director Deven Ghelani. This means that instead of each pensioner costing an average £3,900 more, as the government predicted, they will cost a much higher £6,800.
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Mr Ghelani said: “It’s great news that more pensioners are getting the financial support they need. The increased income for some of the country’s poorest elderly citizens can have wider benefits, providing much needed relief during a cost of living crisis.”
Mr Ghelani said: “Policy in Practice has seen unprecedented demand, helping one in four local authorities to run Pension Credit take up campaigns in the lead up to Christmas. We’ve also been using data to target the Household Support Fund to pensioners just missing out on the Pension Credit threshold.”
“It has meant a life changing boost in income for hundreds of thousands of pensioners living in poverty.” A government spokesperson said:“We do not recognise these figures. An increase in Pension Credit claims, including effects on Housing Benefit and other cash benefits, were factored into the savings certified by the independent OBR.
“It is right that more pensioners are provided with the support they are entitled to. Pension Credit can still be backdated by up to 3 months and is worth on average £4200 so we continue to urge everyone eligible to apply.”