Cash Help for Families Struggling to Pay Energy Bills

Chancellor Rishi Sunak has decided to cool energy price concerns by giving a cost of living help to hard-pressed families struggling to pay their bills.

He launched a £15 billion aid package in Parliament that targets the neediest.

The package comprises several components, some energy customers may claim some or all of them. Funding comes partly from a £5 billion windfall tax on energy companies which have seen profits soar with the price of fuel, gas and electricity.

In April 2022, the energy industry regulator Ofgem lifted the price cap by £693 and warned the following review in the autumn could see the cap would raise another £800. Many low-income households are worried that the price rises could force them to choose between buying a meal or switching on heating.

So, what energy crisis help is the Chancellor offering?

Government critics, including hardline backbench Tories, slammed the Chancellor for not doing enough to help families struggling with day-to-day bills.

But they united across parties to praise Sunak’s measures.

Labour claimed the idea of grants to help families was theirs and that the Tories were playing catch-up, while Conservatives mostly thought the extra money was just enough but could have come weeks ago.

All energy financial assistance is automatic, so there is no need to claim.

And here are the payments:

  • One-off £400 grant

The grant replaces the previously announced £200 loan. As a result, every household will receive a £400 reduction in their bills between October and March. In addition, tenants with pre-payment meters will have a discount credited to the meter or voucher. The payment is in addition to the £150 council tax rebate paid by councils.

  • £650 grant to tenants on benefits

Tenants on means-tested benefits, such as universal credit or pension credit, will be paid this grant in two instalments, starting in July. To qualify, tenants must have made a successful claim by May 25, 2022.

  • £300 grant for pensioners

Anyone aged 66 or over between September 19 and 25, 2022, qualifies for an extra £300 with the winter fuel payment.

  • £150 disability living payment

Paid to people receiving disability benefits, like the personal independence payment (PIP) or disability living allowance (DLA). To qualify, the claimant must have successfully requested their benefit by May 25, 2022.

How the cash impacts energy bills

Low-income homes can benefit from government support by up to £4,200 plus an average wage rise of £900. Families on universal credit have had their benefits uprated by 3.1 per cent.

A low-income household (combined gross annual earnings of £26,000, including a full-time earner on £10 an hour and a part-time earner on the National Living Wage) with two children receiving means-tested benefits should expect to receive additional government support of £3,200, including £850 from the new measures, £350 from the February package and £2,000 from the universal credit taper reduction.

A low-to-middle income working family on universal credit, with two children (combined gross annual earnings of £43,000, including a full-time earner on a median hourly wage of £14.10 an hour, or around £27,000 per year, and another full-time earner on the National Living Wage) will receive £4,200 additional support. This includes £850 from today’s measures, £350 from the February package, £240 from the NICs threshold increase, and £2,900 from the UC taper reduction.

The government says financial support worth £37 billion has been provided to ease the cost of living problems this year. Every household should get at least £400 to help.

Second homeowners are entitled to the grant money for each property.

Landlords who pay energy bills for tenants should ensure the rebate does not stay with them but goes into users' pockets.

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