Pensioners should be asked to ‘opt in’ to continue receiving Winter Fuel Payments, says a leading Tory think tank.
The centre-right think tank Policy Exchange, who have close ties with the Conservatives, said the policy would save taxpayers £400million a year.
The Daily Telegraph has described Policy Exchange as “the largest, but also the most influential think tank on the right”, who have included the Winter Fuel Payments recommendation in a new ‘welfare manifesto‘.
Recipients currently receive between £200 – £300 in payments designed to help alleviate fuel poverty. But Policy Exchange claim only 10% of pensioner households struggle to heat their homes to an acceptable temperature.
Payments are not means-tested and can be claimed by anyone of state pension age, regardless of their financial situation.
Policy Exchange says moving to an opt in system would make it easier for wealthier pensioners to refuse Winter Fuel Payments, while protecting those with the greatest need who would continue to receive payments automatically.
According to the think tank, polling suggests 74% of the general public support making Winter Fuel Payments available to only those of low-income, or with savings below a certain amount.
They added that while the Government operates a scheme allowing better-off pensioners to hand back payments, only a small number have taken up the offer or are aware of its existence.
Steve Hughes, Head of Economic and Social Policy, said: “Presenting pensioners with a choice to receive their winter fuel payment could lead to hundreds of millions of pounds worth of savings, and is just one way to root out perceived unfairness.”
The think tank points out that the charity ‘UK Community Foundations’ is running a campaign urging wealthier pensioners to “recycle” their Winter Fuel Payments, by making a donation of the same amount.
Policy Exchange has also recommended a number of other reforms, which it claims would make Britain’s welfare system “fairer”.
This includes limiting Child Benefit to no more than four children per household, reducing payments progressively for each child after the first, which they claim would save £1bn over the course of the next parliament.
They also recommend including State Pension in the controversial benefit cap, which the Tories would slash from £26,000 a year to £23,000 if they win the next general election.
Contributory-based Jobseeker’s Allowance should be scrapped and replaced with a “national unemployment scheme and system of personal welfare accounts”, urges Policy Exchange. Every worker would be required to make “weekly contributions into the scheme – offset by a cut to their National Insurance”.
Monies raised through the scheme would be used in times of unemployment, “with people who have been in work all their lives set to benefit from £10,000 upon retirement”.
The think tank also recommends “relaxing” benefit sanctions, “by issuing pre-paid benefit cards as a non-financial warning”.
Finally, the welfare system should be more personalised to an individuals needs, says Policy Exchange. “Different people face different issues which prevent them from finding work and being self-sufficient”, says Policy Exchange.
Adding: “The Department for Work and Pensions should attempt to develop a diagnostic tool that segments claimants based on their barriers to work, like in Australia.”
Policy Exchange will mark the launch of their ‘welfare manifesto’ by meeting with Labour MP David Blunkett on Wednesday, who will outline his vision for a 21st century welfare state.
“Any future government needs to consider how to make social security more simple, effective, affordable, and fair”, says Policy Exchange.