Salford Citizens Advice

The government’s emergency energy cost crisis help scheme:

The government has responded to the ongoing energy costs crisis by announcing a new programme of help with these costs rises. Citizens Advice is not convinced that this scheme is the most effective response, and you can see more about why we think this on our national association’s website.

Here are the details of what the government is doing for households in England.

The Energy Rebate Scheme:

 What has the government announced? 

  • The government has announced a package of support to help households with rising energy bills.
  • This includes:  
    • A £200 discount on their energy bill this Autumn for domestic electricity customers in Great Britain. This will be paid back automatically over the next 5 years.  
    • A £150 non-repayable Council Tax Rebate payment for all households that are liable for Council Tax in Bands A-D in England.
    •  £144 million of discretionary funding for Local Authorities to support households who need support but are not eligible for the Council Tax Rebate.  

Why is the government providing support?  

  • The government recognises many households will need support to deal with rising energy costs, which are being affected by global factors.  
  • From 1 April, the energy price cap will rise from £1,277 to £1,971 – an almost £700 increase in energy bills for the average household. 
  • Wholesale gas prices have quadrupled in the last year. Because gas is used for electricity generation this pushes up retail electricity bills as well as retail gas bills. 

How will the Energy Bill Discount Scheme work? 

  • Domestic energy customers in Great Britain will receive a £200 cash discount on their bills this Autumn. The government will provide funding to all suppliers for them to pass on to their domestic energy customers from October.  
  • Customers will pay back the discount automatically in equal instalments over five years, starting from financial year 2023-24, when wholesale gas prices are expected to come down. This is expected to be reflected as an increase to standing charges on bills.   
  • This approach will help to spread the increased costs of global prices over time in a way that is more manageable for households.  
  • The Department for Business, Energy and Industrial Strategy will set out more detail on this policy in a consultation in the spring. 

How will the Council Tax rebate work?  

  • Households in England in Council Tax Bands A-D, who are not exempt from Council Tax, will be eligible for a £150 Council Tax Rebate payment from April this year.  
  • The rebate will be made by local authorities as a payment to households. This won’t have to be repaid.  
  • 80% of households in England are in Council Tax Bands A-D, so will benefit from this rebate. The rebate will not be paid for second homes or empty properties.  
  • Households in England in Bands A-D that pay less than £150 or do not pay Council Tax as a result of Local Council Tax Support will also be eligible for a payment of £150. 
  • People in receipt of the Single Person Discount in Bands A-D will be eligible for a payment of £150. 
  • We expect the vast majority of people who pay by Direct Debit to receive this money in April. For households in Bands A-D who do not pay by Direct Debit, their councils will be ready to process their claims in April.   
  • For those who need help with their energy bills but are not eligible – such as households on income support in higher bands (E-H) or with properties in bands A-D that are exempt from council tax – local authorities will receive £144 million of discretionary funding to help.  

What other help is available for people struggling with the cost of living?  

 The government has also said that it plans to expand the numbers eligible for the warm homes scheme, as well as increasing the value of the grant to £150. This is available to eligible households, see our earlier advice column for information about the current scheme, https://salfordcab.org.uk/salford-citizens-advice-dealing-with-high-fuel-costs-and-the-warm-home-discount-scheme/

You might also qualify for help from the Household Support Fund – which local councils are delivering. In Salford just go to https://www.salford.gov.uk/advice-and-support/salford-assist/household-support-fund/ This is a one-off scheme to help councils deal with the impact of its decision to scrap the £20 a week increase to universal credit, which is due to end by March 31st.

 

 Tom Togher

February 2022.