Following a lengthy review Over-60s will continue to enjoy free bus travel in Scotland, allaying fears the age could be raised, transport secretary Michael Matheson announced today. It follows a Scottish Government review of the £202 million a year scheme, which sparked concerns that eligibility could be narrowed because of its rising cost. In fact, Mr Matheson said the national concessionary travel scheme would be extended to include those travelling with eligible disabled children under five. He said more than 3,000 families and children could benefit.
Earlier threat of an age eligibility increase
The Government is scrapping its Support for Mortgage Interest (SMI) scheme and replacing it with a loan from next April 2018. The move could be a massive blow to thousands of low-income pensioners.
Thousands of pensioners and working-age families are at risk of losing their homes as part of a controversial benefits overhaul.
The Government has announced plans to scrap the Support for Mortgage Interest (SMI) benefit and replace it with a loan from April 2018.
The Department for Work and Pensions (DWP) has been sending out letters to 135,000 households – of which 65,000 are low-income pensioners – telling them to decide whether they want to take responsibility for the loan when the benefit is scrapped.
However, insurer Royal London has slammed the move, pointing out that claimants aren’t being told what rate the new SMI Loan will charge or being given enough guidance on taking out the state-backed second mortgage.
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.