Pensioners who received the Winter Fuel Payment may need to repay the money in four specific circumstances
Some people must repay the benefit(Image: Getty Images/Collection Mix)
Millions of pensioners have received their Winter Fuel Payment, with funds landing in bank accounts throughout November and December. The financial support, aimed at helping offset mounting energy costs, was issued to most over-65s during this period.
Once universally available to all pensioners, the benefit experienced a significant overhaul last year after Labour limited it exclusively to recipients of particular means-tested benefits such as Pension Credit. This reduction saw eligible claimants plummet to merely 1.5 million.
Yet, amid considerable outcry from groups representing older people, the Government changed the rules for the 2025/26 winter season. Chancellor Rachel Reeves restored eligibility for pensioners with annual earnings of up to £35,000, substantially broadening access to nine million claimants.
Those with a date of birth prior to September 22, 1959 were being automatically paid sums ranging from £100 to £300. However, authorities have indicated there are particular circumstances under which beneficiaries are required to repay the funds, reports the Mirror.
Your income surpasses £35,000
Any individual whose yearly earnings exceed £35,000 must return the payment unless they have previously opted out of receiving it. HMRC has clarified that this income limit relates to individual earnings, noting: “If your total personal income for the tax year is £35,000 or less – you’ll keep your payment, more than £35,000 – HMRC will take back your payment.
“If you live in a household with someone else who has also received a payment, we’ll look at each person’s individual income separately. For example, if you earn £36,000 and your partner earns £22,000, we’ll take back your payment, but your partner will keep their payment.”
You don’t report a change straight away
According to government regulations, you’ll need to return funds if you didn’t inform authorities of a shift in your circumstances without delay. This may be relocating to a new address or ceasing to claim a benefit which made you eligible for the payment.
You submitted inaccurate information
Should you have been granted the payment following the provision of incorrect information on your application, you’ll be obligated to repay the money. This might involve something as straightforward as inputting an incorrect date of birth on your documentation.
You’re overpaid due to an error
From time to time, mistakes happen within the DWP or HMRC which lead to individuals receiving more than they should. If this occurs, you’ll be required to refund any amount you weren’t rightfully due.
How to return the funds when your income goes over £35,000If you are not in self assessment
HMRC states that if your personal income exceeds £35,000 you will be required to repay the funds but must wait for it to reclaim the payment. It confirms: “You cannot pay it sooner”.
The guidance states: “We’ll take your payment for the 2025 to 2026 tax year by changing your PAYE tax code for the 2026 to 2027 tax year. This means you’ll pay more tax each month to pay back the full payment that you received in the 2025 to 2026 tax year.
“For example, for a typical payment of £200, you’ll pay approximately £17 per month extra in tax. You’ll get a letter or a notification in the HMRC app to tell you that we’ve changed your PAYE tax code.
“We’ll review all of the tax you paid against the tax you were due to pay. If we have been unable to collect the full amount due during the tax year, in your tax code, we’ll send you a tax calculation.”
Should you receive payments during the 2026 to 2027 and 2027 to 2028 tax years
The guidance continues: “Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your PAYE tax code for the 2027 to 2028 tax year. For example, if you receive a payment in each tax year of £200, we’ll deduct approximately £33 per month extra in tax in the 2027 to 2028 tax year.”
Should you receive a payment for the tax year 2028 to 2029 or beyond
HMRC confirms it will subsequently recover your payment through changes to your PAYE tax code during the tax year when you receive the payment.
For those who complete a Self Assessment tax return
HMRC clarifies the sum must be settled via the standard Self Assessment tax return process, reiterating: “You cannot pay it sooner.” The statement reads: “You do not need to include the payment in your 2024 to 2025 tax return. This is because we’ll not take back any payment you received in the 2024 to 2025 tax year.
“Your payment will need to be included on your tax return for each tax year from the 2025 to 2026 tax year. If you file your tax return online, where possible we’ll automatically include the amount of your payment. It will show on your 2025 to 2026 return, as either a Winter Fuel Payment charge or Pension Age Winter Heating Payment charge.
“You should check that your Winter Payment is automatically shown on your online return and include it if not. If you file a paper Self Assessment tax return, you’ll need to add the payment to your 2025 to 2026 tax return. You’ll then pay the payment back through your Self Assessment tax bill in the tax year in which you receive the payment, unless you opt out of receiving the payment.”