Heating benefits for ex-pat elderly to be cut

Tens of thousands of British pensioners who have left to live in hotter climes are set have one of their benefits cut as part of the coalition government's campaign to drive down unnecessary public spending.

The Independent understands that winter fuel payments, designed to help pensioners pay their heating bills, are in line to be removed from those living in Europe in a measure that would save £14m a year. However, the cut could yet be blocked under European law.

A senior government source said the handout to expats, made despite the much warmer winters many of them enjoy in their new homes, would be examined as Whitehall's spending clampdown begins to bite. "This is going to be investigated," the source said, adding that continuing to pay the allowance to those living in warm, Mediterranean climates simply "was not fair".

Around 65,000 British expats, who have decamped to countries including Spain, France, Greece and Italy, still currently receive the winter fuel payments, which had been designed to ensure that pensioners were not left without the means to pay for heating during the colder months.

Payments worth up to £400 are made each winter. Official figures showed that 63,740 pensioners living abroad are currently receiving the payment. It is paid to all those aged over 60. It is thought to have cost around £100m since Labour launched the scheme in 1997. In total, it costs the Department for Work and Pensions around £2.7bn each year.

But officials already fear the attempts to take the benefits from those living abroad may fall foul of strict European laws preventing the Government from discriminating against those choosing to live abroad. Previous attempts to reform the allowance were abandoned by Labour after ministers hit the same problem.

It is the latest sign that all ministers have been told to find any savings possible from their departments. Some told The Independent yesterday they had spent the weekend looking over Labour's final spending plans to identify where savings could be made to help the £6bn of savings demanded by the Treasury.

Nick Clegg, the Deputy Prime Minister, has signalled his support for reining in the winter fuel payments in the past. "People will be shocked that while thousands of pensioners are struggling to pay their fuel bills this winter, millions of pounds are being deposited into the accounts of people living in sunny Spain," he said in 2008.

"That millions of pounds meant to help pensioners heat their homes is being sent abroad will undermine people's faith in the benefits system. Clearly, there is a need to look at the rules governing how the winter fuel payment is distributed."