/ Use of Winter Fuel Allowance

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Babika - on 18 May 2017
A friend told me that he spent this year's WFA on a new pair of skis.

The re-think for means testing is long overdue
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Bjartur i Sumarhus on 18 May 2017
In reply to Babika:

Do ski's burn well then?
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wintertree - on 18 May 2017
In reply to Babika:

Absolutly. I'll bet the government sign a contract with Capita that costs 2x the realised savings, and that we get lots of news stories about pensioners feeezing to death due to evil means testing...

I'd rather see means tested one off payments to upgrade insulation and heating systems. Treat the disease not the symptoms etc.
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Babika - on 18 May 2017
In reply to wintertree:

Well they managed to "means test" child benefit without any admin costs to consultants and no stories about children starving?
I can't for the life of me think why its taken so long to get round to the abuse of WFA.

Oh, hang on, pensioners vote in their droves don't they?
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Martin Hore - on 18 May 2017
In reply to Babika:

> Well they managed to "means test" child benefit without any admin costs to consultants and no stories about children starving?I can't for the life of me think why its taken so long to get round to the abuse of WFA. Oh, hang on, pensioners vote in their droves don't they?

I may be wrong but I think they "means test" child benefit by not paying it to people in the higher tax bracket - no extra admin because they know who these people are already. It's different for pensioners and the WFA. I'm some way off being in the higher tax bracket but for a variety of reasons (eg savings) that are not readily apparent to whichever government department pays out the WFA I'm comparatively well off and could spend my £200 on climbing gear without going cold. Means testing me and millions of pensioners like me would be quite expensive.

There's another angle on this though. Universal benefits get political support because everyone benefits. Means testing such benefits so that only a minority benefit from them runs the risk of removing that political support. Recipients can be portrayed as "scroungers" rather than "just like you and me". So I'm for keeping the WFA non-means tested, even if much of it is clawed back from me in taxes. Any benefit that everyone receives equally but is paid for disproportionately by the better off counts as progressive redistribution of wealth which, in principle, I support.

Martin

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The New NickB - on 18 May 2017
In reply to Martin Hore:

Just add it to the pension and tax it. Everyone gets it, people with a higher income pay some tax on it.
Tom V - on 18 May 2017
In reply to Babika:
I usually spend mine on gin, though I realise that the warming effect is not as good as that which you get from fossil fuels.


Post edited at 18:57
arch - on 18 May 2017
In reply to Babika:

There should be a separate OAP energy tariff. No way should a senior citizen on a limited income pay the same rate for energy as someone in full time employment.
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john arran - on 18 May 2017
In reply to Babika:

The problem really is that it's called a winter fuel allowance, so people get peeved at the idea of it being used for anything else. If it was just called a pensioners' tax rebate, intended to redress the balance of taxation in favour of older people likely to have been relatively short changed by the rest of the complex tax system, then it would be far easier to accept. Of course, that begs the question of why such a rebate should be necessary in the first place, which is the real issue here.
timjones - on 18 May 2017
In reply to The New NickB:

> Just add it to the pension and tax it. Everyone gets it, people with a higher income pay some tax on it.

That us far too elegant and simple a solution for any government of any political perversion to ever adopt ;)
ByEek on 18 May 2017
In reply to The New NickB:

> Just add it to the pension and tax it. Everyone gets it, people with a higher income pay some tax on it.

I never really understand the idea of paying people money only to tax it back. Surely that is a very inefficient way of doing things. I always wondered if it would be simpler to pay Civil Servants net pay. After all, it comes out of and goes back into the same pot.
Timmd on 18 May 2017
In reply to arch:
> There should be a separate OAP energy tariff. No way should a senior citizen on a limited income pay the same rate for energy as someone in full time employment.

Have a like. It once occurred to me that if the energy industry was nationalised, the amount people paid could be linked to their income, so that people had less of a stark choice between heating and eating, the energy efficiency of their home could possibly be factored in too.
Post edited at 21:13
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john arran - on 18 May 2017
In reply to Timmd:

That would be like nationalising essential services and paying for it through general taxation. It will never catch on as long as the majority of people are too concerned about media reports of a tiny number of people abusing the system to realise they're actually doing rather well out of it.
Timmd on 18 May 2017
In reply to john arran:
I can only assume the two dislikers haven't had to choose between heating and eating?
Post edited at 21:34
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pec on 18 May 2017
In reply to john arran:

> The problem really is that it's called a winter fuel allowance, so people get peeved at the idea of it being used for anything else. If it was just called a pensioners' tax rebate, intended to redress the balance of taxation in favour of older people likely to have been relatively short changed by the rest of the complex tax system, then it would be far easier to accept. Of course, that begs the question of why such a rebate should be necessary in the first place, which is the real issue here. >

In many respects a general increase in pension would indeed have been simpler (and cheaper to administer) but it was introduced (in part I presume) so as to be a highly visible way in which the government was seen to be helping 'vulnerable' people and once introduced it then becomes very hard to remove it without being seen as 'mean'.
The pensions triple lock of the last 7 years seems to have been an effective fix and as such the fuel allowance is mostly unnecessary.

I assume the political calculation now is that regardless of what they put in the manifesto they'll get a large majority anyway so its a good time to loosen the straightjacket that these commitments (and a few others such as no NI or tax rises) impose on the government, a gamble but probably a wise one.

In reply to the OP, my father in law always put his winter fuel allowance towards his annual skiing holiday which is not atypical and shows it was a nonsense as a universal benefit.
john arran - on 18 May 2017
In reply to john arran:

> That would be like nationalising essential services and paying for it through general taxation. It will never catch on as long as the majority of people are too concerned about media reports of a tiny number of people abusing the system to realise they're actually doing rather well out of it.

Actually that logic applies equally well to EU membership ;-)
Babika - on 18 May 2017
In reply to pec:

In reply to the OP, my father in law always put his winter fuel allowance towards his annual skiing holiday which is not atypical and shows it was a nonsense as a universal benefit.

Indeed

I was rather hoping for some interesting anecdotes of what people actually do with it
As this is UKC I suppose new climbing gear, skis and a skiing holiday is quite normal. I have another friend who gives the equivalent sum to charity.

Gin is quite interesting Tom V........

Jim Fraser - on 19 May 2017
In reply to Babika:

Means testing is an authoritarian and usually expensive approach much loved by the Tories and it is one of the approaches that regularly destroys their declared ambitions for smaller government and lower spending.

Universal benefits work well in some circumstances. All you do to obtain the necessary money is tax higher earners. (This obeys my first rule of taxation: you can only get money from people who have money).
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Lusk - on 19 May 2017
In reply to arch:

> There should be a separate OAP energy tariff. No way should a senior citizen on a limited income pay the same rate for energy as someone in full time employment.

Good thinking, especially in the age of smart metering.
Could be achieved with a few taps on a keyboard.
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oldie - on 19 May 2017
In reply to Babika:

Agree WFA should be means tested if the admin involved is worth it. The total per person is often less than £200 as I think there is only one payment per household.

However much the same argument can be applied to the state pension. For example someone who has retired early and is living comfortably on their work pension then gets a sudden influx of state pension at official retirement age. They then may have about £5000 (minus tax) to spend on their skiing holiday, much more than the WTA. Perhaps we should be able to veto what old codgers are permitted to buy if they claim a state pension?
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Offwidth - on 19 May 2017
In reply to Babika:
I just love the way some people allocate money to things in their head. In reality no-one 'spends their winter fuel allowance' on anything, it was just income designed to offset costs of winter fuel for pensioners as a universal benefit, even if the house is super efficient.

I'd like the think the tories would get bitten electorially by these things that will hit one of their natural voter groups quite hard (especially the social care £100, 000 lottery of life) but I'm guessing they respond too well to scare stories in the Fail and Excess: more 'axis of evil' than the TV news mantra of 'coalition of chaos'.
Post edited at 06:15
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Offwidth - on 19 May 2017
In reply to Offwidth:

This person reported in the Times I guess must be anther Trot ? ;-)

"Any policy must avoid unintended consequences and ministers will need to clarify what period of grace will be applied for those who may only need short periods of care. This so-called ‘disregard’ is set at 12 weeks for those needing residential care and it is essential that this also applies to home care. If not, it will exacerbate rather than reduce delays to hospital discharges.

The dropping of the care cap sadly leaves social care uninsurable, leaving in place the miserable lottery of care costs. A future government should at least look again at supporting state-backed insurance for those who have not yet reached retirement age, so that they can begin to protect against this."
pec on 19 May 2017
In reply to Jim Fraser:

> . . . Universal benefits work well in some circumstances. All you do to obtain the necessary money is tax higher earners. (This obeys my first rule of taxation: you can only get money from people who have money). >

But ignores the second rule of taxation which is that for higher earners who typically don't pay tax through PAYE, raising the rate of tax doesn't necessarily increase tax receipts and certainly not by as much as you would expect.
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Irk the Purist - on 19 May 2017
In reply to arch:

If people can't afford to heat their homes then society should be helping them, regardless of their age or working status. There are plenty of people of all ages, in work and out, who think long and hard before the heating goes on.

fred99 - on 19 May 2017
In reply to Timmd:

> ... It once occurred to me that if the energy industry was nationalised, the amount people paid could be linked to their income, ....

The only problem with this is that far too many people would be wasteful of resources, and we'd need twice as much water, electricity, gas and so on.
I've seen this many times whist on winter trips when houses/huts are rented - people putting the heating on full and then leaving the doors open for example.
There has to be some link between usage and the bill to be paid.
The New NickB - on 19 May 2017
In reply to ByEek:

> I never really understand the idea of paying people money only to tax it back. Surely that is a very inefficient way of doing things. I always wondered if it would be simpler to pay Civil Servants net pay. After all, it comes out of and goes back into the same pot.

You still have to calculate the net pay and people don't all have the same deductions. The calculation is where the cost lies, not the actual collection.
Timmd on 19 May 2017
In reply to fred99:
> The only problem with this is that far too many people would be wasteful of resources, and we'd need twice as much water, electricity, gas and so on.I've seen this many times whist on winter trips when houses/huts are rented - people putting the heating on full and then leaving the doors open for example.There has to be some link between usage and the bill to be paid.

You missed out 'the energy efficiency of their home could possibly be factored in too'

I had in mind that it could be worked out what amount of energy would be needed to keep their home 'healthily warm', which would be calculated in combination with their income, so that any energy they wasted and ended up finding themselves short of funds due to doing so, would be their hard luck pretty much.

I might be a liberal - but my Dad has never let me take the mickey. ;-)
Post edited at 13:17
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timjones - on 19 May 2017
In reply to Timmd:

> I might be a liberal - but my Dad has never let me take the mickey. ;-)

I don't know about liberal, you seem to be erring towards excessive state control of our day to day lives ;)
Timmd on 19 May 2017
In reply to timjones:
> I don't know about liberal, you seem to be erring towards excessive state control of our day to day lives ;)

That was lurking in the back of my thoughts, too, to be frank. If it frees up money for people live more fully, to do with affording to eat and maybe further their life prospects as a result towards paying for travel and clothes for interviews etc, it could seem like there's a trade off, or it could depend on how one looks at it?

The notices I saw in my local BTCV centre offering help to people with interview clothes and travel costs during my late teens have stayed with me, how can anybody poor enough to need help with those, easily afford to heat and eat adequately too? Fuel poverty has been in the media too much for people to say it doesn't exist. Energy efficiency of homes is available on the internet, and certain benefits are means tested too. It seems a bit unjust to me that the more savvy people pay less for a unit of electricity or gas.

I'd be among the first to make a fuss to protect my right to internet browsing privacy, and voting privacy etc. The private companies out to profit from providing gas and electricity already control our day to day lives, in being able to stop the supply of heat and energy if we become too poor. We have to use one of them and they all have that power.
Post edited at 13:57
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Tom V - on 19 May 2017
In reply to Babika:

Obviously the gin comment was (fairly) frivolous.
I do what I suspect most recipients do, pass it on to a younger generation in some form or other.
I thought this was a good thing to do till I came across people on here saying that parents passing on "wealth" to their offspring was just a way of perpetuating equalities in society, so ............
Big Ger - on 20 May 2017
In reply to Babika:
Here's one person putting it to good use!!

"The 65-year-old said he claimed his own winter fuel handout, saying: 'With regard to the winter fuel allowance, I spend it on winter fuel. 'But the issue there overall is that I'm on an MPs salary (nearly £100,000 a year, ) and I get taxed as a result of that it will contribute to the overall exchequer and that's the fairest way of doing it."
Post edited at 02:31
L edwardgrundy - on 20 May 2017
In reply to Babika:

Better not means test and put tax up for richer people. Also, better just to shove it on state pension (as someone else said).

L edwardgrundy - on 20 May 2017
In reply to ByEek:

> I never really understand the idea of paying people money only to tax it back. Surely that is a very inefficient way of doing things. I always wondered if it would be simpler to pay Civil Servants net pay. After all, it comes out of and goes back into the same pot.

Expect the main reasons are...

Efficient incentives. The public sector can directly employ people or purchase goods/services from the private sector. If public sector workers don't pay tax they appear artificially cheaper. You could work out a system to get round this, but it would likely be gameable and at least as complicated as paying tax.

Appearance of fairness. Having the public sector 'not pay tax', would be played upon by certain political parties. You might think it could simply be explained that it worked out the same - but lots of people are stupid.

Comparing pay. It would be more difficult to compare public and private sector pay.

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