Pensioners have been left in limbo by the hung parliament election result, with any proposed changes put on hold until a government is formed.
The Conservatives, who were expected to win a solid majority, wanted to scrap the Triple Lock which that the state pension would rise by whichever is the highest of inflation, wage growth or 2.5%, and replace it with a ‘Double Lock’ which would remove the 2.5% annual rise. Under a Conservative government, the state pension age would increase with life expectancy.
They also planned to means-test the Winter Fuel Allowance, which is worth up to £300 a year for older people to help with their heating costs. However, now that the party has failed to win a majority, they may find it difficult to proceed with any of these plans.
Triple Lock and Winter Fuel Allowance
The Conservatives are working towards doing a deal with Democratic Unionist Party (DUP) to form a government, who want to maintain both the Triple Lock and the Winter Fuel Allowance.
We are surprised that subjecting pensioners to new means tests is being suggested for the Winter Fuel Allowance which may require an army of means testers. It would also subject many pensioners to a process that they feel very uncomfortable with. Our suggestion for a long time has been to make WFA subject to taxation in the same way as the State Pension is. We’ve never heard anyone complaining that the very wealthy enjoy the State Pension, so what is the problem with taxing Winter Fuel Allowance? The answer that many may give is that a lot of people will be affected by this, without necessarily being on a massive income. But at least the most needy would get the pension in full, and it would stop the continual bleating about this allowance being paid tax free.
An army of means testers needed ?
Free TV licences for the over-75s could be means-tested once the BBC takes over responsibility for paying for them from the Government.
The benefit is currently universally available for all aged 75 and older, meaning that one in six households or around 4.36 million people do not pay the annual licence of £147.
But the BBC is considering scrapping this benefit for better-off pensioners, who have just learned that if the Conservatives win the general election, they could have to pay significant amounts towards the cost of their social care from savings and the value of their homes.
Supporters of the BBC, including Lord Melvyn Bragg and Lord Puttman, are reported to believe that Theresa May’s manifesto pledge to means-test the winter fuel allowance is an opportunity for the corporation to do the same with the free licences.
Lord Bragg, who voluntarily pays the licence as part of a campaign to encourage wealthy pensioners to support the BBC, told The Sunday Times he thought means-testing would be “a very sensible idea”.
Baroness Altmann has claimed its “ridiculous” that affluent pensioners receive the benefit without a tax penalty – which could help fund social care
AN ex-Pensions Minister is calling for rich pensioners to be taxed on the winter fuel allowance.
Baroness Altmann says it is “ridiculous” they are not — and that the tax penalty could help fund social care.
The Sun on Sunday can reveal just 518 OAPs have declined the payment, which ranges from £100 to £300 and used to help pay heating bills in the winter months, since 2011.
Total government expenditure on it is around £2billion and it is paid to more than 12million pensioners.
Our comment: this has been a recurring hot chestnut over recent years, but so far governments have not responded. Many people forget that the State Pension is taxed for those with sufficient income. We advocate an increase of 25% in the allowance which is then paid with state pension payments, which will be taxable. That way those that need it will get the full amount, and those on higher incomes will be taxed on it.
If you receive Income Support, Employment and Support Allowance or Jobseeker’s Allowance, you may be eligible for a Bus & Tram Discount photocard.
Benefits and eligibility
Pay as you go at half the adult rate on buses and trams, and 50% off 7 Day and monthly (up to 6 months) Bus & Tram Passes.
To be eligible for a Bus & Tram Discount photocard you must be:
Living in a London borough and
Aged between 18 and 60 and
Receiving Income Support, Jobseeker’s Allowance*, or Employment and Support Allowance and
Getting no other free or discounted travel
Poor pensioners and bedroom tax
Thousands of poorer pensioners will be hit by a new “bedroom tax”, despite the Government’s promises to protect the elderly from the hugely controversial benefit cuts.
They are poised to lose at least £300 a year because their homes will be deemed to be “underoccupied”, slashing their incomes or forcing them to move – away from family and friends, or to flats that are unsuitable for older people.
In some cases, the financial pain will be greater – one housing association has identified pensioners in part of the North who are set to lose a staggering £1,700 a year.
Last July the Chancellor made changes to inheritance tax
His intention to lift all but the wealthiest homeowners out of inheritance tax was first revealed when sensitive Treasury papers were leaked to the Guardian before the last budget, which concluded that it would “most likely benefit high income and wealthier households”.
The changes are estimated to cost the Exchequer about £1bn per year.
Our comment:It is difficult to reconcile the fact that so few lower income people will benefit from the inheritance tax changes and so many people with lower incomes, including disabled people will stand to lose from expenditure cuts.
Right-win thinktank the Taxpayers’ Alliance has called on the government to cut pensioner benefits, saying many of those people benefiting might “not be around” at the next election.
Alex Wild, research director of the conservative think tank, also said that other pensioners may forget which government had made the cuts.
Mr Wild is quoted by the BBC as saying that cuts to benefits such as winter fuel payments and free bus passes should be made “as soon as possible after an election for two reasons”.
“The first of which will sound a little bit morbid – some of the people… won’t be around to vote against you in the next election. So that’s just a practical point, and the other point is they might have forgotten [who made the cuts] by then.”
Dr Liam Fox, MP for North Somerset, also appeared on the conference panel, and insisted that any such cuts must be made permanently, in order to help the next generation – something which he suggested that older people would understand his position on.
“We have a broken opposition,” he said. “We have just won a general election and we need now to take the tough decisions we believe are right.”
Dr Fox said that in order to fund current pensioner benefits, the state is “borrowing from the next generation to spend today”. He likened this arrangement to a so-called Ponzi or pyramid scheme, saying that it is unsustainable and must be changed.
New Age UK report shines a spotlight on poverty and inequality among pensioners
Tens of thousands of the very poorest pensioners missed out on an estimated £3.7 billion in Pension Credit and Housing Benefit in 2013/14, according to the latest Government figures analysed in Age UK’s new Chief Economist’s Report .
Published today (Saturday 25 July), the report gives an in-depth insight into key economic issues affecting older people in the UK.
It warns that despite formidable progress to reduce pensioner poverty in the decade following the introduction of the Pension Credit in 2003, the latest government figures indicate that pensioner poverty is creeping up once again: 13% of all pensioners were living below the poverty threshold in 2012/13 but this increased to 14% in 2013/142 .
Today the total number of pensioners living in poverty sits at the 1.6 million mark, with around 900,000 of those living in severe poverty . This entrenched problem is partly explained by the huge numbers of pensioners who don’t claim the benefits to which they are entitled, with around £3.7 billion in benefits designed specifically to help low-income pensioners going unclaimed each year.
In fact the latest official figures show that around 1.3 million people entitled to Pension Credit – which tops up the income of the poorest pensioners – did not take up this vital benefit in 2013/14, missing out on an estimated £2.86 billion in total – or an average of around £2,132 per person per year. In addition around 260,000 pensioners missed out on Housing Benefit during the same period, sacrificing £820 million in total or £3,224 each a year4.
The Budget Pickpocket
A Budget that betrays working parents – that’s what we’ve had from George Osborne today.
Families with kids are going to be really hard hit by the Tories plans. Women are going to be hit more than twice as hard as men – by a Chancellor and a Prime Minister who clearly don’t give a damn about working parents’ lives.
Many families are going to be thousands of pounds worse off as a result of the £4.5bn cuts to tax credits alone, with over 3million families affected. That’s even before you include real cuts in the value of child benefit for the next four years.
If you’re on average pay with two children, you’ll lose £2,000 in tax credit cuts next year.
I’m glad the Tories have finally given in to our calls for a big increase in the minimum wage, but it’s not enough to compensate parents for the tax credits they are cutting. And they certainly shouldn’t call it a Living Wage because it still falls short of that.
A single mum with two children working part time on the National Minimum wage will gain just over £400 from higher pay but lose £860 from lower tax credits in 2016/17.
A couple with two kids both working full time on the minimum wage will still be £700 a year worse off. And if you’re currently paid more than the minimum wage, you’ll be harder hit.
Plus they are actually discouraging parents from working harder. Earn an extra pound or two and they’ll claw half of it back from your tax credits.
Remember how they said a 50 per cent tax was a disincentive for the highest paid people in the country? Yet they are quite happy to do it for the poorest paid.
So much for George Osborne’s promise to help working people. Do parents just not count as working people? Is this the “lifestyle” George Osborne claimed he didn’t want to fund?
Frail pensioners are facing massive hikes to the cost of lifesaving emergency pull cords – which could force them out of their homes.
The weekly cost of the service, which alerts wardens, will rocket from £3.70 to £9.53 by 2017.
Pensioners who do not receive benefits may have to fork out up to £53 a month.
Tory-run East Devon council claimed funding cuts meant “it is only right” the cost should be passed on to sheltered housing tenants.
But disabled Cathy Moyle, 72, said she was being forced “to choose between life and death”.
Cathy, of East Budleigh, gets a pension of just £230 a week with husband Gerald, 85. She said: “Some of my friends are suicidal at the rises.”
The gran of seven claimed residents even feared eviction. She added: “I’m terrified. There’s no option to opt out so it means we have to pay up or leave. They say if we don’t need the cords we don’t need sheltered accommodation.”
The Sunday Mirror previously revealed how the service was being axed in West Midlands because of cuts. Officials said the scheme, which costs just £1.08 a week per person, was too expensive.
The Sunday People has discovered that although they will escape housing benefit cuts in April, many will be caught in the net from October
The Government is conning pensioners by saying they won’t be hit by the savage bedroom tax, the Sunday People has reported .
The Sunday People has discovered that although they will escape housing benefit cuts in April, many will be caught in the net from October.
Yet the Department of Work and Pensions told us earlier: “This measure does not affect pensioners.”
But when Universal Credit is introduced, rolling most benefits into one, thousands of pensioners will suffer if they are new claimants.
The bedroom tax will mean 660,000 people in social housing must pay an average of £14 extra per week to stay in their homes. Among them are some of Britain’s most vulnerable, including the sick and disabled.
Ministers said categorically that the bedroom tax would only affect people of working age. But today we can reveal how pensioners will be clobbered by the wicked scheme.