Bereaved families of dead pensioners could be taxed in a bid to recoup costs for winter fuel payments, reports suggest.
Chancellor Rachel Reeves on Wednesday confirmed that millions more elderly Britons will receive the allowance this year in a major U-turn.
The Government had restricted the allowance to people on Pension Credit or similar benefits, meaning around ten million pensioners lost out.
But according to The Guardian, the Treasury is aiming to claw back the payment of up to £300 from wealthier pensioners through their tax returns to recoup the handouts.
With at least six months between the cash being transferred and the taxman recouping it, thousands of pensioners could die during this period.
On Wednesday, HMRC director Jonathan Athow told the Treasury Committee that if the tax system was used to make the changes, it would not be possible until next year.
Labour insiders have privately raised concerns about the implications of the potentially controversial move.
One source said: “We should never have scrapped the winter fuel payment in the first place, but the whole process of reinstating it has been completely chaotic.
“The optics of us demanding the money back from grieving families are dire.”
After a speech in Rochdale, Greater Manchester, Ms Reeves indicated that the income threshold, currently set at £11,500, will be raised to allow more people to qualify for the benefit.
She told reporters: “We have listened to the concerns that people had about the level of the means test, and so we will be making changes to that; they will be in place so that pensioners are paid this coming winter.
“We’ll announce the detail of that and the level of that as soon as we possibly can.
“But people should be in no doubt that the means test will increase and more people will get a winter fuel payment this winter.”
Critics claim Ms Reeves was forced to change the policy after last month's local elections, which saw a string of victories for Reform UK.
However, Pension Minister Torsten Bell on Wednesday said there is no prospect of returning to a universal winter fuel payment.
He told the Work and Pensions Committee: "The principle I think most people, 95% of people, agree, that it's not a good idea that we have a system paying a few hundreds of pounds to millionaires and so we're not going to be continuing with that.
"But we will be looking at making more pensioners eligible."
