British Government Crackdown on Expat Winter Fuel Allowance: But Are Their Plans Legal

Winter fuel payments to be banned despite European court ruling

British expatriate pensioners who have exchanged the cold weather of the UK for warmer climes are to be prevented from claiming the Winter Fuel Allowance if George Osborne’s plans go ahead.

In a bid to save an estimated 30 million GBP per year, the UK government announced yesterday that any British pensioners who live in European countries that are warmer than the UK will shortly be prevented from claiming winter fuel allowance payments, which are valued at between £100 and £300 per year and are currently available to all British citizens who are aged 65 and over. It is expected that the new rules will come into force in 2015.

The announcement, which was made by Chancellor George Obsborne, will impact around 60,000 UK pensioners living overseas who already claim the benefit, and will also prevent a further 150,000 by 2016, many of whom became eligible because of a recent EU judgment. George Osborne told the House of Commons yesterday: “We will act to ensure that we will stop the cost of paying the Winter Fuel Payments made to those who live abroad rising in a way that no one ever intended.

“Paying out even more money to people from all nationalities who may have worked in this country years ago but no longer live here is not a fair use of the nation’s cash.

“So from the autumn of 2015, we will link the Winter Fuel Payment to a temperature test. People in hot countries will no longer get it. It is after all a payment for winter fuel.”

However, many expatriates living overseas have pointed out that the plans to stop winter fuel payments to expatriates living overseas will be contrary to an earlier European court ruling, which expanded the entitlement to all people with significant links to the UK, regardless of the temperature of the climate in which they live. In a bid to circumnavigate this ruling, the British government plans on introducing a temperature test, which will be used to determine the levels at which the payments are made. The test, which was created with assistance from the Met Office, is based on the average winter temperatures in the UK and countries throughout Europe over the last 29 years. Under the test, expats who live in seven European countries where temperatures are higher than Britain will no longer be eligible for the benefit. These countries include Spain, France, Greece, Portugal, Malta, Gibraltar and Cyprus.

Research by the Institute of Fiscal studies thinktank in 2012 found that only 40% of the pensioners who received the payment actually used it to settle heating bills.