Older people will have to wait at least six years longer to receive winter fuel payments, under government plans to cut the welfare bill.
The Daily Telegraph has learnt that ministers have resolved to increase the qualifying age for the annual payment from 60 to at least 66. Talks are under way about an even bigger rise.
The basic winter fuel payment, made to more than 12 million people, will also be cut by £50 for new recipients and £100 for the oldest.
It would be the first major restriction in a universal benefit under the Coalition, and could open the door to more dramatic announcements, with cuts to child benefit also under discussion.
The move comes despite a pre-election promise from David Cameron to safeguard benefits for the elderly, including winter fuel payments.
Earlier this month, the Government published plans to raise the state pension age for women to 66 by 2019.
Although there is no formal link between the retirement age and fuel payments, Whitehall sources confirmed that eligibility would follow the pension age upwards.
Liberal Democrat ministers, led by Nick Clegg, are pushing for the qualifying age to go even higher.
Some suggest that, ultimately, only those aged 75 and over should receive winter fuel payments. That would bring the benefit in line with free television licences.
Last winter, any household with someone aged 60 or more received a £250 winter fuel payment. For those over 80, it rose to £400.
Those rates were increased by Gordon Brown in 2008, by £50 and £100 respectively.
Mr Brown’s “bonus” cost the Treasury an extra £600million, and pushed the total cost of winter fuel payments to £2.7billion last year.
Treasury spending plans for this year are based on an assumption that the £600million top-up is scrapped.
Critics of the payments say they are unfair because well-off pensioners receive the same as the poorest.
Whitehall talks are focused on how to cut the cost without breaking promises on winter fuel payments.
During the general election campaign, Mr Cameron said that the payments, along with free eye tests and bus passes for older people, would stay in place under a Conservative government. In a televised leaders’ debate in Bristol, he promised: “We will keep the free television licence, we will keep the pension credit, we’ll keep the winter fuel allowance, we’ll keep the free bus pass.”
By contrast, the Lib Dems campaigned on a promise to increase the qualifying age immediately.
As a compromise, the Coalition agreement promised that those benefits would be “protected” but did not give any specific details of what that meant.
The ambiguity in the commitment led some ministers to propose raising the qualifying age for free bus passes to save money.
George Osborne, the Chancellor, said that the Coalition’s welfare cuts would be “progressive”.
“We are engaged as a Government in a collective effort to get this right to both make savings to the welfare bill and to create a simpler, fairer welfare system that, above all, gets people into work,” he told BBC Radio 4.
At a question-and-answer session in the City of London later in the day, he repeatedly refused to rule out curbing entitlements to universal benefits.
Ministers have ruled out means-testing child benefit, but officials believe that it could be cut by reducing payments for second and subsequent children, or lowering the age when payments stop.
Government sources said last night that “all options are on the table”.
“We have to make some very unpleasant decisions, but we have to make sure they are done in the fairest possible way,” a source said.
By James Kirkup, Political Correspondent
Published: 10:55PM BST 17 Aug 2010
Source: The Telegraph