Pension Age Winter Heating Payment (PAWHP): consultation response

Questions 6 to 9: Eligibility and the Value of Payment

Section 4.3 of the consultation asked questions on the eligibility criteria of the new payment, and the value of the payment. Many of the responses given in this section echoed the responses to question 2, in which many outlined possible changes to eligibility and payment value as part of a possible long-term development of the benefit.

Targeting or expanding eligibility

The consultation outlined the proposed eligibility criteria for PAWHP, reflecting the universal approach of identifying eligibility based on a person reaching state pension age, which is currently in place for WFP.

Whilst many stakeholders agreed with the proposed like-for-like approach for launch, many identified a need for better targeting to ensure the money is used to provide support to those who need it most. This includes targeting at those of pension age who have a low income (e.g. through Pension Credit), or those who are at higher risk of fuel poverty. There were also suggestions that PAWHP could be treated as taxable income, to reduce the payment value for those on higher incomes and to prioritise the use of those taxes for support to those who need it most.

When asked whether they agreed with a universal approach to identify eligibility based on individuals reaching state pension age, four fifths (80%) of respondents agreed, 14% disagreed, and 6% were unsure. Among organisations who answered, 81% agreed and 19% disagreed. Only one poverty/fuel poverty organisation answered, disagreeing with the approach.

However, it was frequently noted that not all older people require financial support, and suggestions included that alternative or additional income-based eligibility criteria could be used to identify and target the payment to those who need it most.

It is clear that any targeted approach or expansion of eligibility would increase annual caseload, cost and complexity. We therefore could not deliver PAWHP to a more targeted or extended group of eligible clients and still launch the new benefit by winter 2024/25 as we have committed.

Given the timescales for delivery, it would not be possible to make changes to the eligibility criteria without significant risk to the delivery. It is therefore considered that the present proposals are appropriate to ensure the safe and secure transfer of this benefit. However, we will continue to review the eligibility and scope of PAWHP moving forward.

Payment to those in residential care

The consultation outlined our proposals to reflect the current DWP policy with regards to payment value for people who are living in residential care during the qualifying week, and the period of 12 weeks immediately before the qualifying week, who do not qualify for the ‘full’ rate of WFP.

People in residential care who are not in receipt of specific benefits (e.g. Pension Credit) are entitled to a WFP of either £100 if they are aged 66 to 79 or £150 if they are aged 80 or over. This is because they share the accommodation with other people who are also entitled to the payment and are responsible for a share of the heating costs. This reflects the same shared-rate that someone who is not in receipt of a low income benefit who is living at home would receive.

This proposal received a low level of agreement. One third (37%) of all respondents agreed with this proposal, three in ten (31%) disagreed and a further three in ten (32%) were unsure. Three fifths (62%) of organisations that answered agreed, 8% disagreed and 31% were unsure. However, respondents that disagreed did so for different reasons; they either felt a higher or full rate of payment was appropriate, or called for a lower or no payment to be made.

The consultation also proposed that those who are living in residential care and receiving one of the specific benefits (e.g. Pension Credit) receive no payment. This is because historically people living in a care home and in receipt of an income-related benefit have received public funding for their care and accommodation costs including heating through funding from the local authority. As this is still the case for the vast majority of people receiving Pension Credit, the WFP is not payable.

Overall, only 42% agreed, with one quarter (25%) disagreeing and one third (33%) unsure. Agreement was slightly higher among organisations who answered with half (50%) agreeing. This was the second lowest level of agreement recorded by organisations across the consultation questions. Concerns were raised that those in receipt of low-income benefits were likely to be more in need of support than those not in receipt of such benefits and that this group may need help to cover case costs. Several suggested it should depend on how the costs of residential care are being met, in particular, advocating that those self-funding their care should receive the full payment.

It was acknowledged by some that people in residential care should not receive PAWHP as heating is already covered in their care costs and that support is not needed as residents are already warm or do not face increased fees during the winter; and funding should be targeted to people in their own homes.

Conversely, the need for help to cover care costs was referred to by several to justify why those in residential care should receive some of or the full rate of PAWHP. Some highlighted the very high costs of care, that residents pay for their heating through their care fees, or that rising energy bills are passed onto residents through higher care fees.

Given the Scottish Government’s commitment to deliver a like-for-like benefit, and the understanding that those in receipt of Pension Credit are likely to have their care costs covered by public funding, we do not intend to make changes to the current rules for those in residential care.

Payment value

The consultation outlined proposals to maintain the current WFP payment values, based on the like-for-like approach to delivering PAWHP. WFP currently delivers four different payments of either £100, £150, £200 or £300 for individuals, dependent on their household makeup. Generally, a household with occupants between 66-79 will receive £200 and households with someone over the age of 80 will receive £300.

Varied views were expressed on the payment value. While 56% of individuals who answered agreed with retaining the current value, 28% disagreed and 16% were unsure. Half (50%) of organisations who answered agreed, the remaining 36% disagreed and 14% were unsure.

The most common theme in responses to this question was that the payment should increase as the cost of fuel and energy increases or that the benefit values should rise in with inflation. Most disagreed with the current value for this reason; however, a few respondents agreed with the current value but still called for future payments to match any changes in fuel costs. Some also highlighted increased payment value for those on low incomes (e.g. those in receipt of Pension Credit).

PAWHP is not a means-tested benefit and therefore an increase in payment value would not necessarily be the most effective mechanism to positively impact on fuel poverty levels. Those in receipt of a income-related benefit such as Pension Credit are already entitled to receive the full rate within the relevant age bracket and additional support with heating costs is also available through our Winter Heating Payment. The impact of inflation on Social Security benefits is reviewed on an annual basis. Where up-rating of certain payments is at the discretion of Scottish Ministers, consideration is given to the associated costs of up-rating, the affordability of doing so and the impact that this will have. Any increase in value would have to be met from within the fixed Scottish Budget. We do not, therefore, intend to increase the value of PAWHP for the benefit delivery in winter 2024/2025.

We do recognise that the costs associated with heating homes has increased significantly. This policy aims to mitigate some of the impact of additional domestic heating costs in winter by providing universal, reliable financial support to people of pension age who are more vulnerable to cold temperatures due to their age and therefore have a greater need for household heat.