Chancellor George Osborne says the winter fuel allowance will be subject to a “temperature test” from April 2015 to stop expats in hot countries receiving the payments.
Speaking in the House of Commons last week to deliver the Government’s comprehensive spending review for 2015/16, Osborne said spending money on winter fuel payments to expats is “not fair” and the change will save £30m a year.
Expats living in countries that have a higher average winter temperature than the warmest part of the UK will lose the payments.
Osborne said: “We will stop the cost of the winter fuel allowance to those abroad rising in a way that no one ever intended. EU law says people living in the economic area can claim winter fuel payments from us even if they did not get them when they left the UK.
“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 nations’s cash.
“From the autumn of 2015 we will link the winter fuel payment to a temperature test so people in hot countries will no longer get it. It is, after all, a payment for winter fuel.”
Labour has pledged to scrap the winter fuel allowance for higher rate taxpayers, saving £100m a year. The Conservatives have promised to protect pensioner benefits during this parliament but have included them in a welfare spending cap to be introduced in April 2015.
FortyTwo Wealth Management partner Alan Dick says: “The winter fuel allowance should be abolished for anyone who does not need it rather than on a country by country basis. It cannot be right that higher rate taxpayers receive it.”