The decision to make changes to the winter fuel payment has grabbed headlines over the last month, with millions of people uncertain about what it means for them.

The new Labour lead UK Government says it is facing 'difficult decisions' due to finance woes, but there is also division amongst the party over proposed changes to the scheme that helps pensioners with skyrocketing heating bills in the winter months. 

Here are the key things you need to know about the winter fuel payment.

What is the winter fuel payment?

The winter fuel payment is a tax-free payment distributed to pensioners. It gives them a sum of either £200 or £300 to help them with their heating bills over the winter, as temperatures in the UK plummet.

The amount each individual receives depends on their age and circumstances. Pensioners over 80 years old will often receive a larger amount.

A qualifying week determines an individual's circumstances, and it is between September 16 and 22 this year. Anyone born before September 23, 1958, will not be eligible for the payment, meaning only people aged 66 and over will receive it.

As well as being tax-free, the payment also has no impact on other benefits anyone might receive.

How is it different in Scotland?

This year, the Scottish Government decided to scrap the winter fuel payment lead by the UK Government in favour of a Holyrood-run alternative.

The did this because the Labour government are changing the criteria for how people receive the money. However, Holyrood has not unveiled it’s alternative plan yet.

Winter Fuel Payments were devolved following the Smith Commission, with the new Pension Age Winter Heating Payment (PAWHP) due to be paid out for the first time later this year. 

Initially, the plan was to keep it like-for-like, with all those above state pension age eligible for a single annual payment of between £100 and £300 for individuals.

However, Social Justice Secretary Shirley-Anne Somerville confirmed that the PAWHP would now be deferred to 2025/26. 

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What are the proposed changes?

After claiming an emphatic victory in this summer’s general election, Labour now wants to put some restrictions on the winter fuel payment to help plug a £22billion gap in their finances.

The fuel payment used to be given to every pensioner, and it would be put directly into their bank accounts. However, new changes to the scheme will now make the cold weather benefit means tested.

Last month, the Chancellor announced that ‘difficult decisions’ would need to be made in light of the funding black hole.

The winter fuel payment will now also be restricted to those on pension credit. The vast majority of those eligible, will only receive the payment if they have first claimed pension credit.

Pension credit is a state pension top up, and according to the Department for Work and Pensions, is worth more than £3,900 a year in itself.

The government claims that an estimated 880,000 pensioners are failing to claim pension credit, and therefore could lose out on the fuel payment.

Why are the changes controversial?

The answer is simple. Because millions risk being thrown into fuel poverty due to not receiving the payment.

Sir Kier Starmer’s party says it does not want to be restricting the fuel payment in the UK, but they have been left with limited choices.

The party claims that restricting the payment is needed to help fill the £22b black hole which was left by the Tories.

Mr Starmer has previously said he will not apologise for the changes, but recognised it would be an unpopular decision.

Trade Union leaders have ben outspoken about the policy change and branded it “cruel”.

They say the restriction is not saving anywhere near enough money to have a real impact, and that Labour should tax the wealthy instead.

TUC’s Sharon Graham said: “People do not understand how a Labour government has decided to pick the pocket of pensioners and, at the same time, leave the richest in our society totally untouched.”

The issue is also causing division amongst Labour, with some MPs calling on the Chancellor to reverse the decision.

Labour MP Richard Burgon said: “Five out of six pensioners below the poverty line will lose their Winter Fuel payments. That's 1.6 million pensioners in poverty. Gordon Brown introduced this policy to protect pensioners' health. Removing it will put many in danger. For me, that's why cutting it is so wrong.”

Scottish Labour leader Anas Sarwar also said that means testing the formerly universal benefit would make the criteria ‘too narrow’’.