We have summarised below the three main sources of government support to assist householders with their energy bills for the coming year. They are:
- 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.
The devolved administrations are receiving around £715 million funding through the Barnett formula as usual where UK Government support does not cover Scotland, Wales or Northern Ireland.
Details of each scheme are set out below:
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.
- The government is providing new funding to local authorities for these rebates, as well as extra funding to help with increased administrative costs.
- 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.
- Further details will be set out by the Department for Levelling Up, Housing and Communities and local authorities.
Will people across the whole UK benefit?
- The £200 energy bills discount applies across England, Wales and Scotland. The Northern Ireland Executive is responsible for energy policy in Northern Ireland. The Northern Ireland Executive will be funded to provide comparable support with around £150 million through the Barnett formula next year. The Barnett formula will also be applied when UK Government spending is recovered in future years, which will result in lower funding for the Executive in those years.
- The £150 Council Tax Energy Rebate applies in England only, as Council Tax policy is devolved in Wales, Scotland and Northern Ireland. As a result, the devolved administrations will receive around £565 million extra funding through the Barnett formula, which will enable them to provide similar support. They will be able to choose whether to spend this funding this year or next year.
- This comprises around £290million for the Scottish Government, £175million for the Welsh Government and £100million for the Northern Ireland Executive.
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