North East Post
A Voice of the Free Press
12:23 PM 31st May 2022

Energy Bills Support Scheme Explainer

Image by Gerd Altmann from Pixabay
Image by Gerd Altmann from Pixabay
Energy bills are rising because it is more expensive for the companies who supply our energy to buy oil, coal, and gas. The reasons gas prices are soaring are global, including demand for energy from a long cold winter in 2021 to 2022, increased demands as business resumes after the COVID-19 pandemic, and as many countries seek to end their dependence on oil and gas from Russia following that country’s illegal invasion of Ukraine. Over the last year, the price of gas alone has quadrupled. The energy price cap increased in April to take account of these increased prices.

1. What is the Energy Bills Support Scheme?

The government recognises that many households need support to help deal with rising energy bills. That is why it’s providing a package of support worth £37bn which includes the Energy Bills Support Scheme.

Through the Scheme, domestic electricity customers in Great Britain will receive a £400 grant which will appear as a credit from energy suppliers from October 2022 onwards. This will not need to be repaid.

2. Will I be eligible for the Energy Bills Support Scheme?

All households with a domestic electricity connection will be automatically eligible for the £400 grant. There is no need to contact energy suppliers concerning this at this point.

3. Do I need to apply for the support scheme?

Households will not need to apply for the Scheme, and in most cases we expect electricity suppliers to apply the reduction automatically to bills from October 2022.

The government are working hard to design the delivery of this and there may be some variations in how consumers receive the benefit, depending on how they pay for their energy, for example whether by direct debit or through a prepayment meter. However, all households with a domestic electricity meter should receive the £400 reduction.

4. Is it a government loan?

This is a grant and will not need to repaid. The earlier policy to recoup the payment has been cancelled following a further analysis of the sustained high energy prices and input received. by spreading some of the costs over a few years, so they are more manageable for households.

5. When will we receive further clarity on the design and delivery of the scheme?

The government are working on the specifics of delivery and are actively engaging with energy suppliers, consumer groups and Ofgem to ensure that delivering this grant is as simple and efficient as possible.

A consultation on the Scheme concluded on 23 May. Responses are being analysed and the government response will be published later in the summer.

6. Is the scheme UK-wide?

The payment through energy bills will apply across England, Scotland and Wales. Energy policy is devolved in Northern Ireland. The Northern Ireland Executive will be funded to provide comparable support with around £150m through the Barnett formula in financial year 2022 to 2023.

7. I am on a traditional pre-payment meter, will I get the £400?

Yes. Previous schemes have used vouchers to reach those on prepayment meters and we will ensure that households whose energy is managed in this way will receive the grant.

8. If I live in a park home, will I get the £400? Or if I pay for energy in my rent, how do I make sure my landlord passes on the reduction?

The government recognise that there are certain situations where a third party will be responsible for the bill (and be named on it). In these situations, any charges should then be passed onto the end user, typically through all-inclusive rent (landlord or tenant) or ‘pitch’ charges (for example park homes).

The government are exploring this issue as they continue to develop the policy and have gathered more evidence through the consultation.

9. I don’t need this, can I opt-out?

All households with a domestic electricity connection will be automatically eligible for the £400 grant.

In line with the high-level principles, they want to design a scheme that is simple to deliver while maximising the reach and ensuring that additional costs are minimised.

10. What if I change payment method or tariff, or if my energy supplier goes bust?

The government are still designing the scheme but will ensure that customers who switch payment methods, or whose energy suppliers fail, will not be penalised.

11. What if I move house or switch supplier?

All suppliers will be applying the reduction to bills from October 2022.

12. This support does not fully cover the increased cost of the energy price cap – why not?

This scheme will help over 28 million households with the increased costs of global energy prices.

This £400 non-repayable grant for energy bills is in addition to a non-repayable £150 Council Tax rebate for those in England in bands A to D and £144m in discretionary funding for local authorities to support households who are not eligible for the Council Tax reduction.

This means the majority of households will receive £550 in total.

Support has been provided to devolved administrations to deliver comparable support in those jurisdictions.

This is one of many government support measures in 2022 to 2023 to help families with the cost of living. This includes reducing the Universal Credit taper rate, cutting fuel duty, raising the National Living Wage, freezing alcohol duty and providing targeted help with energy bills for the most vulnerable households.

13. When will we be informed on the final details and design of the scheme?

The fundamental elements of the Scheme are fixed, and we are now working to design the detail of implementation and delivery.

The government response to its recent consultation on the scheme is expected to be published in the Summer.