Pension Age Winter Heating Payment: Equality Impact Assessment (EQIA)

Pension Age Winter Heating Payment: Equality Impact Assessment (EQIA)

Title of Policy

Pension Age Winter Heating Payment

Summary of aims and desired outcomes of Policy

Pension Age Winter Heating Payment (PAWHP) will replace the UK Government’s Winter Fuel Payment (WFP), a reserved benefit, paid annually in November or December, to individuals of state pension age who are on low incomes.

In winter 2022/23, around 11.4 million people received a WFP, under the universal policy, an increase of around 157,000 (1.4%) payments from the previous year. The number of people receiving State Pension has seen a similar increase over this time-period.^[1]

In August 2024, the Chancellor of the Exchequer Rachel Reeves announced the UK Government’s decision to restrict eligibility to Winter Fuel Payment to those in receipt of relevant benefits. These changes reduce the Block-Grant Adjustment associated with devolution of the UK’s Winter Fuel Payment by an estimated £150 million in 2024-25, over 80% of the cost of the Scottish Government’s planned replacement benefit, PAWHP.

On 14 August 2024, following careful consideration of the options available for Scotland, the Scottish Government announced that on grounds of affordability as a result of the budget cut, it must mirror the decision made by the UK Government and restrict eligibility for Pension Age Winter Heating Payment to older people on relevant benefits.

We therefore intend to introduce Pension Age Winter Heating Payment (PAWHP), mirroring the decision to deliver WFP to those of pension age in receipt of relevant benefits.

The timing of the UK Government announcement, and the lack of consultation or discussion with the Scottish Government, has meant it is not practicable for the Scottish Government to deliver Pension Age Winter Heating Payment this winter. This winter, 2024/2025, this new benefit will be delivered by the Department for Work and Pensions under an agency agreement with Scottish Ministers. This approach seeks to ensure that eligible individuals in Scotland receive support over the Winter and will ensure that there is no gap in provision in winter 2024/25 following the UK Government’s announcement to restrict Winter Fuel Payments to those in receipt of relevant benefits.

PAWHP will provide older people in receipt of relevant benefits with additional support to help meet increased heating costs during this winter. This support is particularly important given the significant increase in energy prices amid the cost of living crisis.

This will be an investment of approximately £30 million which we anticipate will assist between 110,000 to 130,000 older people, dependent on Pension Credit up-take.

The key policy aim of this new benefit is to provide pensioners in receipt of the relevant benefits with extra support to help meet increased heating costs during the winter. This support is particularly important given that energy prices remain high amid the current cost-of-living crisis.

PAWHP will be a single annual payment of £200 or £300 for individuals, dependent on the person’s age and their entitlement to relevant benefits during the qualifying week in September, when entitlement is established.

Directorate: Social Security Directorate

Division: Social Security Policy Division

Team: Winter Heating Benefits Policy Team