New benefit plan to help pensioners with fuel bills

Scotland's social justice secretary is expected to announce a new benefit to help pensioners who lost their winter fuel payments.

The BBC understands the new devolved benefit is to be ready in time for next winter.

Details about the value of the payments and whether the sum will vary are expected to be set out by Shirley-Anne Somerville in a statement to the Scottish Parliament later.

The existing winter fuel payment has been cancelled by the UK and Scottish governments this winter, except for those already in receipt of Pension Credit.

It is thought the Scottish government has found some additional money to help older people in need of assistance this winter but that this funding will be a relatively small amount.

An estimated 900,000 people in Scotland are losing out after Chancellor Rachel Reeves cut universal provision of winter fuel payments.

That came as part of a package of measures aimed at closing what Labour has called a "black hole" in public finances left over by the previous Conservative government.

The Scottish government, which had been due to introduce a replacement benefit north of the border in April, had said Labour's move left it £150m short as it pushed back those plans back until late 2025.

In August, Somerville said she had "no choice" but to follow the UK government's decision to limit those pensioners who qualify for the payment.

That came as Scotland’s finance secretary ordered ministers to “constrain all but essential" spending to help pay for public sector pay deals.

Last week, Scottish Labour leader, Anas Sarwar, appeared to distance himself from his London colleagues when he announced he would expand eligibility for the winter fuel payment if his party were to form the next Scottish government.

Under the party’s plans, all pensioners would receive a payment via a devolved benefit, though it would be tapered so that the wealthiest households received less.

Sarwar said his proposals would "deliver a fairer system that guarantees everyone who needs support gets it".

He said all pensioners would receive the benefit – which is currently either £200 or £300 – without having to apply, but that better-off Scots would pay some of it back.

"A good way of thinking about it is how child benefit currently operates," the Scottish Labour leader told BBC Scotland.

“[It is] widely viewed as a universal payment for everyone, but when it goes beyond a certain income threshold a taper is then applied,” he said.

Prime Minister Sir Keir Starmer has previously defended his decision to cut winter fuel payments.

He said an increase in the state pension - which is set to rise by £460 per year in April - would "outstrip" losses for those who will not receive the winter fuel payment.

As the debate continues, new UK government figures show a spike in claims for Pension Credit since the chancellor revealed plans to means test the winter fuel payment.

Reeves announced the move on 29 July. In the 16 weeks since then, about 150,000 Pension Credit applications have been made across the UK – up by almost 150% compared with the 16 weeks before the chancellor’s statement.

However, the number of approvals has risen by just 17% over the same period, while refusals almost doubled from 27,100 to 53,100.

The UK government is urging pensioners to check if they are eligible for the benefit.

Those who apply before 21 December will receive backdated payments of both Pension Credit and the winter fuel allowance.

The Department for Work and Pensions has deployed 500 extra staff to handle claims for the benefit.