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Should pensioners pay back their winter fuel benefits?

For many pensioners, the package of additional benefits that is paid on top of the state pension  provides a vital boost to their tight budgets.

But a row has broken out within the Coalition over the fact that the benefits - worth several hundred pounds - are paid out in equal amounts to the UK's richest and poorest pensioners.

It has prompted work and pensions secretary Iain Duncan Smith to this week call on wealthy retirees to give up or pay back their winter fuel payments, free bus passes and free TV licences if they can afford to do without them.

Pay it back: Iain Duncan Smith has encouraged wealthy pensioners to forego winter fuel payments, free buss passes and free TV licences.

How much are these benefits worth?

Everyone born on or before July 5, 1951 (aged 61 or over), is entitled to a winter fuel payment of £200 to help with heating bills when the cold weather sets in. The amount rises to £300 for those over 80.

Payments are made in November or December and are paid automatically to those claiming the state pension or another benefits. Those of a qualifying age who do not claim such benefits must register to receive the payment from the Department for Work and Pensions.

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The over-75s meanwhile are entitled to a free TV licence worth £145.50 for colour televisions and £49 for black and white sets.

And by law, those over the age of 62 get a free bus pass for off-peak travel from their local authority, with the qualifying age rising to 66 by 2020. How much this is worth depends on how much they are used.

Can't the Government just withdraw these benefits from the wealthy?

That is what the Liberal Democrats want, a means-tested system so that those with the biggest incomes are automatically excluded.

Critics warn that the financial benefit to the state of this would be limited because of the costs of imposing and administering a system of means testing.

The Conservatives are stymied from cutting back of pensioner benefits by an election pledge from David Cameron that promised to protect winter fuel payments, free bus passes and TV licences, and pension credit for the first term in Government.

In February, Mr Cameron re-iterated and extended this pledge, saying the benefits would be protected until a year after the 2015 General Election - if the Conservatives are still in power.

Hence Mr Duncan Smith's suggestion that those in a position to pay back or cancel the benefits do so voluntarily.

The debate has even prompted Tory MP Glyn Davies to suggest well-off pensioners should donate cash equal to their additional benefits to charity, leading to an incredibly inefficient situation in which people pay tax, this cash is handed to pensioners in benefits, who then pass it on to charity.

You're refunded! Lord Alan Sugar said in 2010 he attempted to pay back his £200 winter fuel payment, but was told by civil servants to keep it.

How can you pay back the benefits?

There have been rumblings in the past, not least by Lord Alan Sugar, about the difficulty of paying back the winter fuel payments, but the DWP has  set up a hotline that allows people to ask to pay it back and be removed from the list.

Thus far around 200 people are believed to have asked to be removed from the list.

To do this, you can call the helpline on 0845 915 15 15 and ask for furtue payments to end.

If you want to return money already paid, you can can send the payment back in cheque format by post to the DWP, including a covering letter stating whether they wish to cancel payments for future years as well.

For bus passes, local councils are charged by transport companies based on a formula which calculates how much pensioners use their buses. So if you don't use your pass and instead pay for your journey, then your local council will not be charged for it.

So, in order to opt out of the free bus pass, you can simply not use it.

Free TV licences are paid to qualifying people once they have applied for it. So, if you don't want it, simply don't apply for it.

Those who already have a free licence will have it renewed every three years. Before the renewal date, they will be contacted to see whether they still need it. They can cancel it and request a paid for one in the meantime by calling TV Licensing on 0300 790 6131.

Should wealthy pensioners give up their benefits?

What do you think? Should wealthy retirees take one for the team and give back benefits they arguably don't need - much like higher-paid parents now have to do with child benefit?

Is it the case that it's the Government's fault it will not renege on the Prime Minister's pre-election promise, and it's unfair to use guilt to push people into paying back benefits they are entitled to?

Or, with everyone's circumstances different, is it unfair to discriminate when it comes to pensioners' benefits based on an arbitrary, means-testing system?

Energy comparison site uSwitch.com has conducted research which suggests limiting winter fuel payments to wealthier recipients would be a popular move, provided the money saved is passed on to those desperately in need.

But at a time when pension savers are having the goalposts shifted with alarming regularity, should the Government leave our current crop of pensioners well enough alone?


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