Tuesday, March 02, 2010

Cheap and nasty - but cheap!

Every year, just before Christmas, I get a £250 winter fuel payment. Very welcome, but if I'm honest I don't really need it - I have no real problem paying my fuel bills. There must be many like me, so perhaps it is not surprising that there are constant calls for it to be means tested. But would this in fact save money? Because it is paid automatically to every pensioner, the cost of administering it is virtually nil. If you means test it on the other hand, administration costs become significant. You have to have - and pay for - the staff to assess everybody on an individual basis and decide whether they meet the criteria or not, to make sure that those who are entitled to it get it, and those that aren't, don't. And then you have to set up an appeals procedure to deal with those who have been refused and are not happy about it. And these costs are ongoing because people's circumstances are continually changing. As is often the case in matters like this, the "universal" approach is often the cheapest.

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