A Winter Fuel Payment proposal could "protect" the £300 energy bill support for 1.6 million pensioners across the UK.
Last month, Chancellor Rachel Reeves confirmed the benefit would be means-tested which means older people will now need to be in receipt of Pension Credit to claim it.
This comes ahead of the pending energy bill hike this winter with Ofgem raising the price cap on households with average usage in October.
A former pensions minister has floated linking eligibility for the Winter Fuel Payment to council tax bands as an alternative to Reeves' plan.
Sir Steve Webb, a partner at Lane, Clark & Peacock (LCP), has suggested paying the benefit only to households in bands A to D.
The Government adopted this approach when administering certain cost of living payments in 2022.
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Pension Credit is a benefit reserved for lower income pensioners GETTYLCP cited that pensioner poverty rates are highest for those living in the lowest value properties.
As such, linking to council tax bands would ideally "protect" the vast majority of low-income pensioners.
While this would be a boon for state pensioners, it would significantly reduce any savings that the Treasury is looking to make.
The Chancellor has previously slammed the last Conservative Government for leaving a £22billion "black hole" in the public finances.
The LCP partner broke down why linking council tax bands to the Winter Fuel Payment may be a necessary move.
"There is a range of ways in which the Government could target spending on Winter Fuel Payments, but our analysis shows that limiting payments only to those on Pension Credit will leave the vast majority of pensioners below the poverty line losing out," Webb said.
"As an alternative, Winter Fuel Payments could be targeted at those in lower-value properties, which would protect most poorer pensioners but would dramatically reduce the savings for the Chancellor."
According to the pensions expert, there are also other options on the table when it comes to protecting pensioner access to the Winter Fuel Payment but the Government could run into trouble if attempting to implement them.
He added: "Taxing Winter Fuel Payments would raise far less than the Government’s plans and could be administratively complex.
"It is ultimately a matter for politicians to decide on the balance between raising revenue and protecting the vulnerable.
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Winter Fuel Payment warning: Pensioners face 'widespread suffering' this winter as energy bill support axed"But, it is clear that continuing payments only to those on pension credit will mean large numbers of already low-income pensioners losing out."
A Government spokesperson told GB News: "This government is committed to pensioners: protecting the triple lock, keeping energy bills low through our Warm Homes Plan, and cutting NHS waiting lists – bringing real stability to people’s lives.
“We said we would be honest with the public and, given the dire state of the public finances we have inherited, this Government must take difficult decisions to fix the foundations of the economy.
“In these circumstances it is right that Winter Fuel Payments are targeted at those in most need, and we will work with Local Authorities to boost the uptake of Pension Credit, reaching the many pensioners who could still benefit from this year’s Winter Fuel Payments.”
