Benefits for the elderly, including the winter fuel allowance and free bus travel, are being targeted by ministers in the hunt for |spending cuts.
The Government is also considering whether to scrap child benefit payments to better-off families to help fund an overhaul of the welfare state.
As ministers grapple with politically unpalatable decisions, Chancellor George Osborne said the coalition's actions would help to build a “fairer” Britain.
But, as the Coalition reaches its 100th day in office today, the need to agree huge savings has sent |tensions soaring between Cabinet colleagues.
The biggest flashpoint is between the Department for Work and Pensions and the Treasury over where the axe will fall on the benefits bill. Work and Pensions Secretary Iain Duncan Smith has been told by Mr Osborne he must identify further deep savings in his budget if he is to realise his |ambition of fundamentally reforming welfare.
Mr Duncan Smith's problem is that redesigning the benefits system to make it simpler will cost up to an estimated £3bn. The Chancellor has told him to identify savings of £13bn, on top of benefit cuts already announced in the Budget, to justify that cost.
Mr Duncan Smith is considering ways of limiting winter fuel allowances for older people, £250 per household last year, or £400 where at least one partner is 80 years old. One possibility is raising the qualification age to 75. Alternatively, winter fuel allowances could cease to be paid to over-60s and instead targeted only at the worst-off pensioners.
Ministers are also examining the £1bn-plus cost of providing free off-peak travel from the age of 60.