Photo of Kwasi Kwarteng

Kwasi Kwarteng (Spelthorne, Conservative)

To ask the Chancellor of the Exchequer what estimate he has made of the likely level of revenue to the Exchequer of (a) removing winter fuel allowance from people who pay the higher rate of income tax and (b) making winter fuel allowance taxable for recipients paying the basic income tax rate.

Photo of Steve Webb

Steve Webb (The Minister of State, Department for Work and Pensions; Thornbury and Yate, Liberal Democrat)

I have been asked to reply

on behalf of the Department for Work and Pensions.

The estimates in the following tables are based on Department for Work and Pensions expenditure forecasts combined with information on the tax paid by older people from Her Majesty's Revenue and Customs Survey of Personal Incomes.

(a) The following table provides estimates of the expenditure associated with winter fuel payments, for higher rate taxpayers, assuming the 2012/13 payment rate of £200 for people that have reached women's state pension age and are under 80, and £300 for people aged 80 or over. The figures are expressed in cash terms and rounded to the nearest £10 million.

Support for older people, millions of pounds, cash terms
  Winter fuel payments expenditure for higher rate taxpayers
2012-13 90
2013-14 100
2014-15 100
2015-16 100
2016-17 100

(b) The following table provides estimates of how much would be paid in income tax on winter fuel payments at 20% for basic rate taxpayers if the payments were not exempt from taxation, assuming the 2012/13 payment rate of £200 for people that have reached women's state pension age and are under 80, and £300 for people aged 80 or over. The figures are expressed in cash terms and rounded to the nearest £10 million.

Estimated reversion to Exchequer if winter fuel payments for basic rate taxpayers were subject to income tax, millions of pounds, cash terms
2012-13 200
2013-14 200
2014-15 200
2015-16 210
2016-17 220

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