Forcing rich pensioners to pay back winter fuel allowance would be tax ‘nightmare’, Reeves warned
Questions have been raised over Rachel Reeves’ winter fuel U-turn after it emerged the government plans to reinstate the payments for all pensioners before attempting to claw it back from millions through higher taxes. The chancellor is expected to set out Labour’s plans to reverse the controversial policy change at Wednesday’s spending review, but fresh questions have been raised over how the government will distribute the payments. Reports suggest Ms Reeves will from this autumn restore the grants, worth up to £300, to the 10 million pensioners who had lost out. But only those in the bottom half of average incomes will keep the payments, with the top half of earners forced to repay the grant through higher tax bills over the course of the year. One option for the threshold at which pensioners are eligible is average household disposable income, currently around £37,000, The Times reported. Such a plan would resemble George Osborne’s high income child benefit charge, which sees 1 per cent of total child benefit received taxed for every £100 earned over £60,000. It means that, over whatever threshold Ms Reeves sets for the payments, an amount will be clawed back from those on higher incomes. Rachel Reeves has said her fiscal rules are ‘non-negotiable’ More