This piece first appeared in The Daily Telegraph on 7 December 2002
The text here may not be identical to the published text

The Government is giving away £1.7 billion this Christmas to 11 million people over 60. Most will get it automatically. But up to 250,000 will have to make a claim. Evidence from last year indicates that 25,000 of them will not do so – losing them nearly £4 million. And there is potentially around £75 million pounds from previous years waiting to be claimed.

This Christmas present is, of course, the winter fuel payment. It goes to everyone aged 60 or more – which this year means people born on or before 22 September 1942. The payment is normally £200 for each person over 60. However, a couple get £100 each and anyone who shares a home with another qualifying person also gets £100. People in care homes get £100 unless they get minimum income guarantee in which can they get nothing.

The money is paid regardless of income, is not taxed and does not affect entitlement to means tested benefits. It is the closest thing to free money that any government has ever paid. Anyone who has had the payment in a previous year should get it automatically before Christmas. And anyone who already gets a state retirement pension or any other payment from the Department for Work and Pensions should get it without claiming. However, that leaves out men aged 60 to 64 – who are too young to get a state retirement pension – and some older women who have no state pension entitlement. Both groups will normally have to make a claim when they first become entitled. It can still be claimed for this winter – though it will not arrive before Christmas.

Last winter, 500,000 people became entitled for the first time and 255,000 were paid automatically. Of the rest 220,000 claimed leaving at least 25,000 without their payment. This year’s claim has to be in by 30 March 2003. However, a quirk of the law means that claims for 1997/98, 1998/99 or 1999/2000 can still be made by people who were eligible at that time. Official figures indicate that up to 700,000 people are owed a total of up to £75 million for those years.

There is also a large number of people outside the UK who can now claim the payment but have not. As revealed in Your Money earlier this year (14 September), the Government has been forced to extend the payment to 30,000 people currently living in 19 European countries at a potential cost of £10 million a year. However, the latest figures show that only 2040 people living abroad have actually claimed – and they have received just £154,200.

More than 1.5 million of those eligible for Winter Fuel Payment are still working and many others have an adequate income from pension or savings. So if you do not need it why not give it to charity – and boost your gift with yet more money from the Chancellor. Anyone who pays tax can give money to a charity under Gift Aid which enables the charity to reclaim the basic rate tax already paid. If you write a cheque for £200 through Gift Aid then the charity can reclaim basic rate income tax of £56.41. And it gets better. If you earn enough to pay higher rate tax – total income this year of £34,515 or more – then you can record the gift on your self-assessment tax form and recover £46.15 for yourself. Alternatively if you want to give away the whole £200 then write a cheque to the charity for £260. The charity then claims basic rate tax of £73.33 back from the Inland Revenue and you get £60 knocked off your tax bill when you fill in your self-assessment form. It costs you nothing, the charity gets £333.33 and it all comes from Gordon Brown! It really is Christmas. All you have to do is send your gift with a letter saying that you want it to be made under the Gift Aid scheme and that you will pay tax in 2002/03 which is at least as much as the amount reclaimed by the charity.

If you want your Winter Fuel Payment to go to older people who need help why not send it to Help the Aged? The Daily Telegraph and Help the Aged have set up a special fund that will be used in their work helping poorer pensioners throughout the UK. Cheques to Help the Aged Telegraph Winter Appeal, Help the Aged, 207-221 Pentonville Road, London N1 9UZ.

Claim Winter Fuel Payment online at The Pension Service or call 08459 151515

Gift Aid information from the Inland Revenue or call 0151 472 6065

7 December 2002

e-mail Paul Lewis on paul@paullewis.co.uk