Some state pensioners over the age of 80 may have to pay back the Winter Fuel Payment over the coming months. The Department for Work and Pensions (DWP) will pay between £100 and £300 to eligible claimants in November and December to offer more support ahead of the cold winter. However, the full payment will be clawed back if your individual taxable income exceeds £35,000.
Payment details and eligibility
The Winter Fuel Payment is a tax-free grant designed to help people of State Pension age pay their heating bills. It is paid automatically, and the amount you receive depends on your age, who you live with, and whether you receive means-tested benefits.
Unless you opted out before September 2026, HMRC will gradually claw back the money if you earn £35,000 or more. It is a strict cut-off, meaning an earning of £35,001 triggers a 100% recovery of the funds.
Expert warning on income rules
Gordon Wallis, energy expert at Your NRG, said: "The Winter Fuel Payment can provide valuable support for pensioners facing higher heating bills, but it's important that people understand the income rules before relying on this money."
"Some households may see the payment arrive in their bank account and assume they can put it straight towards their winter energy costs. However, if their individual income is above £35,000, they could end up having to repay the full amount through the tax system."
"It's particularly important for couples to understand that the threshold applies individually, not to their combined household income."
How HMRC recovers the payment
The DWP confirmed: "If your total income is over £35,000, HMRC will take your Winter Fuel Payment back. Your partner’s income does not count towards your total."
The £35,000 threshold, which is your total taxable income for the tax year before deductions, such as State Pension, private pensions, employment, and savings interest, is assessed strictly on your own personal income. Your partner's earnings do not count toward the strict limit.
HMRC claws back the Winter Fuel Payment money automatically through the income tax system. The body will never ask you to send a bank transfer or cheque back to the DWP.
If you do not file a tax return, HMRC lowers your Personal Allowance tax code on your private pensions or wages. This spreads the repayment out as an extra monthly tax deduction.
Meanwhile, if you already complete a Self Assessment tax return, HMRC will not alter your tax code. Instead, the money is added to your annual bill as a "Winter Fuel Payment charge."
