Overseas Pensioners Enjoy Winter Fuel Cash

Millions of pounds of winter fuel payments are being paid out to British pensioners living in warmer climes like Tenerife and the Mediterranean. Now the British government is being asked to review the benefit. Last year 30,000 payments were made to overseas residents, which cost the British taxpayer £8 million.

The tax-free payment is payable in November to most Britons over the age of 60. It was introduced in the winter of 1997-8 at a rate of £20 for a single person. Today, however, it has risen to £200 or £300 for someone over 80.

There has been a massive increase in the number of British pensioners opting to live abroad over the last few years.

All British pensioners who were eligible for the payment while still resident in the UK are still entitled to claim the money provided they live within the European Economic Area, which includes the 27 EU member states, as well as Norway, Iceland, Switzerland and Liechtenstein.

Some in Britain argue that the benefit was introduced to ensure the elderly kept warm in the British winter where average temperatures fall to between 3C and 4C. They were never intended for pensioners in countries such as Spain where winter temperatures rarely drop below 11C.

If past experience is anything to go by, this winter will see yet another increase in the number of overseas residents claiming the benefit and the recent addition of Bulgaria and Romania to the EU will swell the numbers.

By far the largest number of benefits made to overseas residents are paid to pensioners living in Spain where the number of payments has risen from just over 5,000 in 2002-3 to more than 24,600 last year – at a cost of £3.9 million.

Alistair Carmichael, the Liberal Democrat MP for Orkney and Shetland, called on new Prime Minister Gordon Brown to review the payment to overseas residents living in warm climes. He said: “This is by anyone’s standards a substantial amount of money, which seems to defeat the purpose of the benefit being made available. The treasury should be looking in some way at how this issue can be addressed.”

A spokesman for the department of work and pensions said: “European Community law means that some benefits acquired in one member state must be paid to people when they move to another country within the EEA. The winter fuel payment is only paid to former UK residents living in the EEA if they qualified for it before leaving the UK. We must treat all those states equally and may not, therefore, make payments based on winter temperatures.”