Changes to winter fuel payments: The Social Fund Winter Fuel Payment Regulations 2024

Approximate read time: 15 minutes

On 11 September 2024 the House of Lords is due to consider the following motion to reject the Social Fund Winter Fuel Payment Regulations 2024:

Baroness Altmann (non-affiliated) to move that an Humble Address be presented to His Majesty praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, be annulled because they would significantly reduce state support for pensioners without sufficient warning and without a proper impact assessment, and because they present a significant risk to the health and wellbeing of many pensioners on low incomes.

1. Summary of the proposed changes

The government has announced changes to winter fuel payments to be implemented in the Social Fund Winter Fuel Payment Regulations 2024.^[1] The government intends for payments to be means tested. People not in receipt of pension credit or “certain other means-tested benefits” would no longer receive winter fuel payments.^[2] Since 1998 the payment has been given to everyone in receipt of the state pension regardless of their other income.^[3] The government has said it has had to make some “difficult decisions to fix the foundations of the economy due to the dire state of the public finances”.^[4]

The explanatory memorandum to the regulations states that the government expects to make savings of £1.3bn in 2024/25 and around £1.5bn in subsequent years as a result of the policy.^[5]

The House of Lords Secondary Legislation Scrutiny Committee has said that the Department for Work and Pensions (DWP) had told it that the policy would mean 9.3 million fewer individuals would be claiming the payment in 2024–25:

In supplementary material, the Department for Work and Pensions (DWP) told us that the estimated number of claimants in England and Wales for 2024–25 is expected to be 1.5 million individuals in 1.3 million households. This represents a decrease of 9.3 million individuals and 6.3 million households from the 10.8 million individuals in 7.6 million households who claimed in 2023–24.^[6]

The government has launched a drive to try to increase the uptake of pension credit by eligible people not yet in receipt of it so that they can also receive the winter fuel payment.^[7] It has also announced funding for an extension to the household support fund, which “will enable local authorities in England to help vulnerable people and families receive discretionary emergency crisis support as we help people through the winter”.^[8]

2. Announcement of changes to winter fuel payments

On 29 July 2024, the chancellor of the exchequer, Rachel Reeves, made an oral statement in the House of Commons on public spending.^[9] She accused the previous Conservative government of “covering up” the state of the UK’s public finances. She said she was told by officials that the day-to-day spending set out in the spring budget in March 2024 did not reflect what the then government had expected to spend this year. She said this amounted to a £22bn overspend on public finances:

Once we account for the slippage in budgets that we usually see over a year and the reserve of £9bn designed to respond to genuinely unexpected events, that means that we have inherited a projected overspend of £22bn. That is a £22bn hole in the public finances now—not in the future, but now. It is £22bn of spending this year that was covered up by the Conservative party. If left unaddressed, it would mean a 25% increase in the budget deficit this year, so today I will set out the necessary and urgent work that I have already done to reduce that pressure on the public finances by £5.5bn this year and over £8bn next year.^[10]

As part of the government’s response, the chancellor announced that people not in receipt of pension credit or “certain other means-tested benefits” would no longer receive winter fuel payments.^[11] People who received pension credit would continue to get winter fuel payments of £200, or £300 for households in receipt of the credit where someone was aged over 80. Ms Reeves said that the scale of the economic situation meant the government had to make “incredibly tough choices”. She said this was not a decision that she wanted to make:

[…] nor is it the one that I expected to make, but these are the necessary and urgent decisions that I must make. It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.^[12]

The chancellor said that alongside the change to winter fuel payments she would work with the secretary of state for work and pensions “to maximise the take-up of pension credit by bringing forward the administration of housing benefit and pension credit”. The government would also work with older people’s charities and local authorities to raise awareness of pension credit.

The shadow chancellor, Jeremy Hunt, responded for the opposition. He said that Rachel Reeves would “fool absolutely no one with a shameless attempt to lay the grounds for tax rises that she did not have the courage to tell us about”. He said that the public finances had been recently audited by the Office for Budget Responsibility (OBR):

Those public finances were audited by the OBR just 10 weeks before the election was called. We are now expected to believe that, in that short period, a £20bn black hole has magically emerged, but for every single day in that period—in fact, since January, in line with constitutional convention—the right hon. Lady had privileged access to the Treasury permanent secretary. She could have found out absolutely anything she needed.^[13]

Director of the Institute for Fiscal Studies Paul Johnson argued that “it was always clear and obvious” that the spending plans inherited by the incoming Labour government were “incompatible” with its plans for public services and that more funding would have been needed at some point.^[14] However, he said the in-year funding shortfall would add to the problem:

But the extent of the in-year funding pressures does genuinely appear to be greater than could be discerned from the outside, which only adds to the scale of the problem.^[15]

He described some of the specifics as “indeed shocking” and argued that it raised “some difficult questions for the last government”.

3. Parliamentary scrutiny of the Social Fund Winter Fuel Payment Regulations 2024

3.1 House of Lords Secondary Legislation Scrutiny Committee

The House of Lords Secondary Legislation Scrutiny Committee (SLSC) considers the policy merits of regulations and other types of secondary legislation subject to parliamentary procedure, both negative and affirmative.

The SLSC has drawn the Social Fund Winter Fuel Payment Regulations 2024 to the special attention of the House.^[16] The committee said:

We are unconvinced by the reasons given for the urgency attached to laying these regulations and are particularly concerned that this both precludes appropriate scrutiny and creates issues with the practicalities of bringing in the change at short notice.^[17]

In its report the SLSC expressed concern about a number of issues raised by the policy. These included:

• The impact on pensioners not claiming pension credit they were entitled to. The committee said that the group of pensioner households on low incomes was potentially “far larger than just those who claim benefits”.^[18]The committee said it was not clear whether the DWP had assessed the risk that the regulations “may cause potential inequalities between low income pensioners claiming benefits and low income pensioners not claiming benefits”.^[19]
• Estimating the additional cost of more people taking up pension credit. The committee said the DWP told it that its estimates for the number of winter fuel payment claimants for 2024–25 assumed there would be a five percentage point increase in the take-up of pension credit. The government was going to bring together the administration of pension credit and housing benefit “so that pensioner households receiving housing benefit will also receive any pension credit to which they are entitled”.^[20] The committee welcomed this initiative and the campaign to increase take-up of pension credit but said that the House may wish to ask the government “what the cost (including administrative costs) of the estimated additional five percentage point take up in pension credit is expected to be”.
• The short notice given for introducing the policy. The committee referenced press reporting that said claims to pension credit could take nine weeks to process.^[21] The committee said the DWP had told it that claims for pension credit could be backdated for up to three months and that “the latest that someone could make a successful backdated claim [for pension credit] to qualify for the 2024–25 winter fuel payment is therefore 21 December”.^[22] The committee said the House may wish to ask the government whether these timings would reassure claimants that their winter fuel payments would be paid “so that they feel confident to put their heating on when needed”.^[23]
• The announcement by the energy regulator, Ofgem, that the cost of electricity and gas for a typical household would rise by £149 per year from 1 October to 31 December 2024, a 10% increase.^[24] The SLSC stated that the House may wish to ask the government whether it had considered the impact of the changes to winter fuel payments and the increase in energy costs happening at the same time. The committee also noted that the continued freezing of personal tax allowances meant more pensioners also had to pay income tax.

The SLSC said it was generally regarded that the implementation of “major policy changes” during a parliamentary recess was “poor practice”.^[25] The regulations’ explanatory memorandum stated that the regulations were laid during the summer recess because they needed to come into force on the first day of the ‘qualifying week’, which would be 16 September 2024.^[26] The amount a person receives is based on when they were born and their circumstances between 16 and 22 September 2024, called the ‘qualifying week’.^[27] The explanatory memorandum said that unless the preceding regulations were repealed by 16 September 2024, the new regulations would not be able to supersede them.^[28] The SLSC questioned whether it would have been possible to “delay or remove the existing trigger date and then present the replacement scheme at a later date, which would have afforded greater time for scrutiny in Parliament and elsewhere”.^[29]

The SLSC also expressed concern that the timelines for the scrutiny of the regulations had implications for the Social Security Advisory Committee (SSAC):

All benefits regulations are required by law to be considered by the independent Social Security Advisory Committee (SSAC). This is generally done in advance of the legislation being laid. In this case, the minister has opted for the urgency provision that allows SSAC consideration to be retrospective. Since this might be perceived as bypassing SSAC scrutiny, we asked the DWP what, if any, effect an adverse report from that committee would have after the regulations have already come into effect. DWP responded that, in line with their legal duty, ministers would lay the report before Parliament, and should the report contain recommendations, lay a statement before Parliament alongside the report. It remains unclear what the practical impact of any statement might be on regulations which will have already come into effect.^[30]

3.2 Motions in the House of Lords

The Social Fund Winter Fuel Payment Regulations 2024 were made on 22 August 2024 and laid before both Houses on the same day. They are subject to the made negative procedure:

Made negative is the term used to describe an SI that is laid after it has been made into law (signed by the minister). It will remain law unless a prayer motion is passed by either House (or the Commons only for certain SIs on financial matters) within 40 sitting days. If that happens, the SI is no longer law. Made negatives generally do not come into force for at least 21 days after the SI is laid.^[31]

The regulations would come into force as law on 16 September 2024.

The House of Lords ‘Companion to the standing orders’ explains that a resolution to reject a negative instrument takes the form of a humble address to the King.^[32] If Baroness Altmann’s motion were passed it would have the effect of rejecting the regulations:

Baroness Altmann (non-affiliated) to move that an Humble Address be presented to His Majesty praying that the Social Fund Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, be annulled because they would significantly reduce state support for pensioners without sufficient warning and without a proper impact assessment, and because they present a significant risk to the health and wellbeing of many pensioners on low incomes.

Two further ‘regret’ motions have been tabled by members of the House of Lords:

Baroness Stedman-Scott (Conservative) to move that this House regrets (1) that the Social Fund Winter Fuel Payment Regulations (SI 2024/869), laid before the House on 22 August, will leave pensioners worse off in winter; (2) the decision to prioritise above-inflation pay rises for unionised public sector professionals over the needs of the elderly, including many households that are eligible for Pension Credit but do not claim it; and (3) the lack of transparency on these policy decisions during the election period.

Lord Palmer of Childs Hill (Liberal Democrat) to move that this House regrets that the Social Winter Fuel Payment Regulations 2024 (SI 2024/869), laid before the House on 22 August, will remove support from many of the poorest pensioners at the same time as the energy price cap is being lifted; and calls on the Government (1) to take steps to identify those who are eligible for pension credit but do not claim it so that they can receive both benefits; (2) to support vulnerable pensioners this winter; and (3) to take action to end fuel poverty, including with an emergency home insulation programme and a windfall tax on the profits of oil and gas companies.

These motions would allow the House of Lords to express a particular view on the regulations but, if passed, they would not have the effect of rejecting the regulations.

It is rare for the House of Lords to agree fatal motions on delegated legislation; that is, motions that would have the effect of rejecting the legislation. Between the 1997–98 and 2022–23 sessions there have been 50 fatal motions tabled in the House of Lords, of which four were agreed.^[33] The most recent fatal motion which was agreed by the House of Lords was on the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Amendment of Schedule 1) Order 2012. The House has more recently agreed so-called ‘delaying’ motions. In the 2015–16 session it agreed two amendments to an approval motion, both of which delayed consideration of the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 until certain conditions were met.^[34] It is more common for the House of Lords to agree non-fatal motions, such as regret motions. Between the 1997–98 and 2022–23 sessions the House of Lords considered 102 non-fatal motions, of which 46 were agreed. The House considers a large number of affirmative and negative instruments. For example, in the 2022–23 session it considered 296 affirmative and 641 negative instruments.

During the House of Commons business statement on 5 September 2024, the leader of the House of Commons, Lucy Powell, announced a debate on 10 September 2024 on a motion relating to the Social Fund Winter Fuel Payment Regulations 2024.^[35] Later, she indicated there would be a vote on the motion:

Yes, we have scheduled a vote on the winter fuel payment next week, because we are not afraid to have the debate about how we got to where we are. That vote would not have happened under the Conservative party, but we respect Parliament and doing things properly.^[36]

4. Commentary

There have been responses to the proposed winter fuel payments changes by a number of organisations. For example, Caroline Abrahams, charity director at Age UK, said the charity opposed the changes to winter fuel payments because it said it would cause a lot of people difficulty:

We strongly oppose the means-testing of winter fuel payment (WFP) because our initial estimate is that as many as two million pensioners who badly need the money to stay warm this winter will not receive it and will be in trouble as a result—yet at the other end of the spectrum well-off older people will scarcely notice the difference—a social injustice.^[37]

Disability Rights UK has said that 45% of all pensioners are disabled, with this figure rising to almost 80% of those aged 85 or over.^[38] The charity said the changes would “leave millions of older disabled people without any financial assistance with the extra costs of heating, required to stay safe and healthy”. Dan White, policy and campaigns officer, said the changes would come at a bad time for pensioners:

This announcement could not have come at a worse time. We know the energy price cap is likely to rise this October and stay high across the winter. This will keep energy bills high and completely unaffordable for the most financially vulnerable.^[39]

Disability Rights UK has also said it welcomed the extension of the household support fund but that “it does not undo the damage being caused to millions of disabled pensioners through the government’s withdrawal of winter fuel payments from those on low and limited incomes, who are not eligible for means tested benefits”.^[40]

The trade union Unite has expressed concern that the policy change would not save any money if all pensioners entitled to pension credit who do not currently claim it took up the benefit:

The proposed cuts to winter fuel payments will only save about £1.4bn a year. But if all the pensioners who are entitled to pension credit are prompted to apply for it as a result, the total cost of paying out this unclaimed money would cost the government £2.2bn a year—so it might save nothing at all.^[41]

5. Read more

• House of Commons, ‘Written statement: Cost of living (HCWS58)’, 2 September 2024
• HM Treasury, ‘Fixing the foundations: Public spending audit 2024–25’, 2 August 2024
• House of Lords Library, ‘House of Lords data dashboard: Delegated legislation’, 13 December 2023

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Cover image by Age Without Limits.