Millions of pensioners have received their Winter Fuel Payment, with the funds landing in bank accounts to help offset rising energy costs. The financial support was issued to most over-65s throughout November and December.

Once universally available to all pensioners, the scheme underwent a significant overhaul last year when Labour limited eligibility to those receiving particular means-tested benefits such as Pension Credit. This dramatically reduced the number of beneficiaries to 1.5 million. Yet, after an outcry from pensioner campaign organisations, the Government made changes for the 2025/26 winter. Chancellor Rachel Reeves restored the payment for pensioners with annual earnings of up to £35,000, vastly broadening entitlement to nine million individuals.

Those born prior to September 22, 1959 were automatically paid between £100 and £300. However, authorities have confirmed there are particular circumstances where beneficiaries must repay the funds, reports the Mirror.

You have an income over £35,000

Those whose yearly income exceeds £35,000 are required to return the payment unless they’ve previously opted out of receiving it. HMRC explains this income limit relates to individual earnings, confirming: “If your total personal income for the tax year is £35,000 or less – you’ll keep your payment, more than £35,000 – HMRC will take back your payment.

“If you live in a household with someone else who has also received a payment, we’ll look at each person’s individual income separately. For example, if you earn £36,000 and your partner earns £22,000, we’ll take back your payment, but your partner will keep their payment.”

Failure to promptly report changes

According to government regulations, you’ll be required to return the money if you fail to promptly inform officials of any changes in your circumstances. This could include situations such as moving house or no longer receiving a benefit that made you eligible for the payment.

Providing incorrect information

If you were granted the payment after providing inaccurate details during your application, you’ll be required to refund the money. This could involve something as simple as entering an incorrect date of birth on your form.

Overpayment due to error

Occasionally, mistakes within the DWP or HMRC result in people receiving an incorrect payment. In such cases, you’ll be expected to repay any amount you weren’t entitled to receive.

Repaying the money when your income exceeds £35,000

For those not in self-assessment

HMRC states that if your personal income exceeds £35,000, you’ll have to repay the money but must wait for it to reclaim the payment. It clarifies: “You cannot pay it sooner”.

The statement reads: “We’ll take your payment for the 2025 to 2026 tax year by changing your PAYE tax code for the 2026 to 2027 tax year. This means you’ll pay more tax each month to pay back the full payment that you received in the 2025 to 2026 tax year.

“For example, for a typical payment of £200, you’ll pay approximately £17 per month extra in tax. You’ll get a letter or a notification in the HMRC app to tell you that we’ve changed your PAYE tax code.

“We’ll review all of the tax you paid against the tax you were due to pay. If we have been unable to collect the full amount due during the tax year, in your tax code, we’ll send you a tax calculation.”

The statement advises for those who receive payments in the 2026 to 2027 and 2027 to 2028 tax years unless they opt out of receiving the payment, it will be collected for the 2 tax years by changing your PAYE tax code for the 2027 to 2028 tax year. It explains: “For example, if you receive a payment in each tax year of £200, we’ll deduct approximately £33 per month extra in tax in the 2027 to 2028 tax year.”

HMRC says if you receive a payment for the tax year 2028 to 2029 or onwards it will then collect your payment by adjusting your PAYE tax code for the tax year in which you receive the payment.

If you complete a Self Assessment tax return.

HMRC clarifies that the money must be repaid through the usual Self Assessment tax return, adding: “You cannot pay it sooner.”

The statement reads: “You do not need to include the payment in your 2024 to 2025 tax return. This is because we’ll not take back any payment you received in the 2024 to 2025 tax year.

“Your payment will need to be included on your tax return for each tax year from the 2025 to 2026 tax year. If you file your tax return online, where possible we’ll automatically include the amount of your payment. It will show on your 2025 to 2026 return, as either a Winter Fuel Payment charge or Pension Age Winter Heating Payment charge.

“You should check that your Winter Payment is automatically shown on your online return and include it if not. If you file a paper Self Assessment tax return, you’ll need to add the payment to your 2025 to 2026 tax return. You’ll then pay the payment back through your Self Assessment tax bill in the tax year in which you receive the payment, unless you opt out of receiving the payment.”