What benefits changes are happening in the October budget?

The Labour government's first autumn budget after its return to government is set to feature what Sir Keir Starmer has labelled "painful" decisions that will mean "big asks” of the public.

Chancellor Rachel Reeves is widely expected to introduce tax increases when she announces the budget on 30 October, but her options are limited by Labour's promise not to increase taxes paid by "working people". Attention will also turn to how much the government spends on benefits – especially following the decision to axe winter fuel payments for millions of pensioners.

In a speech back in August, the prime minister warned: “I’ll have to turn to the country and make big asks of you to accept short-term pain for long-term good, the difficult trade-off for the genuine solution."

In the run-up to the budget, Yahoo News runs through the key benefits under the spotlight and what we know about potential changes.

Winter fuel payment

What is it?

The winter fuel payment is currently a one-off payment of either £200 or £300 to all pensioners. The amount received is based on when you were born (before or after 23 September 1944) and your circumstances between 16 and 22 September 2024.

Those who live in a care home are also eligible for the winter fuel payment.

Recipients are usually informed in October or November how much they are entitled to.

Confirmed changes

On 29 July, Reeves announced that winter fuel payments would become means tested from autumn onwards. It means those not in receipt of pension credit or other means-tested benefits such as income support and universal credit will no longer receive the winter fuel payment from this year onwards.

The changes mean 1.5 million people will be eligible for the payment this winter, down from 11.4 million when the payment was a universal benefit.

The policy has been criticised by some groups.

Caroline Abrahams, charity director at Age UK, told Yahoo News the decision to means test for winter fuel payments is being introduced "simply too late" and that millions could fall into hardship due to this. Age UK is calling for the government to delay this by at least a year.

"Restricting winter fuel payments to only those pensioners who receive pension credit guarantees that millions who also badly need it will miss out, making them suffer real hardship and putting their health at risk. This is both reckless and wrong, and it's imperative the government thinks again."

Household support fund

What is it?

This means-tested benefit was first introduced in 2021, and is aimed at helping those struggling to pay for food, utility bills and essential items such as clothing and electrical goods.

People need to apply to their council and show evidence they are in need of support, such as unaffordable bills or bank statements that demonstrate they are on a low income or experiencing hardship.

Confirmed changes

The government has already announced that the fund, which was due to end on 30 September, will be extended until April 2025. Around £420m of funding will be paid to local authorities across England.

An additional £79m has been allocated to Scotland, Wales and Northern Ireland.

The amount paid to recipients – and in what form – varies between councils, but the most common appears to be a maximum of £500 per tax year. Councils typically pay individual's bills directly, award cash or send vouchers.

Council tax discount

What is it?

A council tax discount can reduce the amount of council tax someone pays, with eligibility based on income, age, disability, or employment status of household members.

Being the sole occupant of a home also means a 25% single-person discount.

Possible changes not ruled out

On 2 September, deputy prime minister Angela Rayner, who is also housing secretary, refused to rule out the single-person council tax discount being scrapped when pressed on the issue in the Commons by shadow housing secretary Kemi Badenoch.

Badenoch said: “Will she [Rayner] take this opportunity to reassure the House that the government has no plans to increase council tax as they assured us before the election?” Rayner replied, “Yes.”

Tory MP Graham Stuart sought further assurances from Rayner that the single-person discount would remain, highlighting its importance for pensioners.

Rayner responded by referencing the debt left by the previous Conservative government, but did not directly address Stuart’s question.

State pension

What is it?

The state pension is paid out when someone reaches the age of 66. The age will increase gradually, starting with those born after 5 April 1960, who must be 67 to receive the state pension. In 2044, the pension age will increase to 68.

Aside from age, another requirement is that the claimant must have paid national insurance for at least 10 years. Pensioners need to apply to receive their state pension, as it isn't paid automatically upon reaching the state pension age. The maximum amount paid is £221.60 per month.

Rumoured changes

Pensioners could see a boost of more than £400 per year next April, reports suggest.

The Treasury’s internal working calculations, reportedly seen by the BBC, revealed the state pension could be boosted by that amount as a result of the triple lock.

Changes would take the full state pension to around £12,000 in 2025/26, after the £900 increase in 2023.

Pre-2016 retirees who may be eligible for the secondary state pension could see a £300 per year increase.

Personal independence payments (PIP)

Personal independence payments (PIP) help with extra living costs if you have a long-term physical or mental health condition or disability.

There are two tiers of PIP. The lower rate is £72.65 per week, paid when someone reaches eight points in the daily living portion of the assessment. The enhanced rate is £108.55 per week. Those with mobility issues are given £28.70 per week or the rate of £75.75 per week.

What we know about the budget:

Changes to disability benefits are expected, as work and pensions secretary Liz Kendall said that cutting NHS waiting lists could help more people get into work as some people are “stuck”.

Last month, Kendall revealed a “Back to Work” plan that will aim to “tackle the root causes of worklessness, including poor physical and mental health”. She also said Labour's long-term aim is to get 80% of the country into work.

The previous Tory government began a consultation on reshaping PIP that closed a couple of weeks later. There were suggestions that PIP payments could be changed to a voucher system or one-off grants.

A DWP spokesperson told Yahoo News: “We are committed to championing the rights of disabled people so their views and voices are at the heart of all we do. We will now consider the responses to the consultation.”

David Southgate, policy manager at disability equality charity Scope, urged the government to not go ahead with the changes put forward by their predecessors. He said that any changes that make PIP harder to access could lead to the further isolation of disabled people and more strain on the NHS as it could affect their ability to work.

“Life is a lot more expensive for disabled people, and benefits like PIP can help cover costs like wheelchairs, breathing machines, support with housework, or taxis because public transport isn’t accessible," he said.

“The ideas in this consultation were part of a plan to take away the low amount of income PIP provides.

“PIP urgently needs reform, but the government should work with disabled people to improve the benefit rather than make it worse.”