Pensioners can verify now if they are going to have Winter Fuel Payment reclaimed
An HMRC online tool is available to help check whether they’re likely to have the payment recovered through taxes
Winter Fuel Payments will be paid to pensioners unless they choose to opt out of receiving the money(Image: Getty)
Older people in the UK can now verify whether a Department for Work and Pensions (DWP) payment valued at up to £300 will be reclaimed from them. Higher income pensioners can now utilise a new online HM Revenue and Customs (HMRC) calculator to determine whether Winter Fuel Payments or Pension Age Winter Heating Payments may subsequently be recovered via tax.
The reminder was featured in a recent DWP Touchbase newsletter. Changes to both annual payments were implemented last winter.
As reported by the Daily Record, under the updated arrangements, Winter Fuel Payments and Pension Age Winter Heating Payments will be automatically distributed to pensioners unless they actively decide to opt out of receiving the money.
However, HMRC will recover the payment from pensioners whose total individual income exceeds £35,000. According to official guidance, repayment will take place either through an automatic tax code adjustment in 2026 or through Self Assessment tax returns.
The £35,000 threshold applies to a person’s total taxable income, including:
- State Pension
- Private and workplace pensions
- Earnings from employment
- Savings interest
- Dividends
- Rental income
- Taxable state benefits
HMRC has launched an online calculator to help pensioners estimate their total income and establish whether they’re likely to have the payment recovered through taxation. The guidance confirms that income is assessed on an individual basis rather than per household.
This means one partner in a couple may need to reimburse the Winter Fuel Payment or Pension Age Winter Heating Payment while the other keeps it.
HMRC gave the example of a pensioner with an income of £36,000 whose partner earns £22,000. In this case, the person with the higher income would have to pay back the benefit, while their lower-earning partner would retain it.
Pensioners throughout Scotland, England, Wales and Northern Ireland who expect their income to exceed £35,000 can also choose to refuse future payments altogether.
The UK Government suggested this might help some people avoid having to repay the money later through the tax system.
An online opt-out form for those entitled to the Winter Fuel Payment can be found on GOV.UK, while a telephone service is also available for individuals unable to use the online system.
Scottish pensioners can opt out by ringing Social Security Scotland on 0800 182 2222 between 8am and 5pm, Monday to Friday. Full information is available on MYGOV.SCOT.
HMRC also confirmed pensioners cannot repay the benefit early as a one-off lump sum. Instead, the money will usually be clawed back gradually through adjustments to their PAYE tax code.
The guidance indicates a typical £200 Winter Fuel Payment could increase someone’s tax bill by around £17 per month during the recovery period. HMRC stated pensioners ought to have received correspondence by letter or email from April this year if their tax code is being adjusted to reclaim the payment.
For those submitting Self Assessment tax returns, the Winter Fuel Payment or Pension Age Winter Heating Payment recovery will be included in their yearly tax bill instead.
The UK Government explained that pensioners who decide to opt out can choose to re-enter the scheme later if their situation changes.
Both payments are designed to help older people with heating costs during the winter period and are typically paid automatically to qualifying pensioners.
Full information about using the online tool can be found on GOV.UK.
