Older state pensioners in council tax bands A to D can stack together winter fuel payments and receive up to £400 of support for heating and energy bills this winter.
Chancellor John Healey announced a new £100 Household Energy Payment in the Budget on Wednesday, aimed at helping households with the spiralling cost of energy bills. Current forecasts predict that the Ofgem price cap could rise by as much as £465 in January, according to EDF Energy, which would represent a staggering 87.7% year-on-year price rise for gas.
How the payments stack up
As well as extending the VAT cut on electricity and scrapping the daily standing charge for gas, the Chancellor announced the £100 Household Energy Payment which will be paid to households in council tax bands A to D.
This means that state pensioners living in a house in council tax bands A, B, C or D will be able to get the £100 Household Energy Payment on top of their existing Winter Fuel Payment.
The Winter Fuel Payment itself gives state pensioners up to £300 of support for energy bills. For state pensioners aged under 80, the payment is £200 (or £100 for a state pensioner under 80 who lives with another state pensioner under 80). Then, for a state pensioner aged over 80, the payment is increased to £300.
Eligibility and payment details
These payments are paid regardless of income, though those earning over £35,000 in a single tax year will have to hand back the winter fuel payment in their HMRC tax code or via self-assessment.
The Household Energy Payment is not means tested in this way, but is simply based on council tax band, so a state pensioner aged over 80 living in council tax bands A, B, C or D will get £400 of winter fuel payments this winter.
The £300 Winter Fuel Payment is paid out between November and January, while the £100 Household Energy Payment will be paid from January.
Government defends the measure
A letter from the Local Taxation Division, Ministry of Housing, Communities and Local Government says: "The government recognises the impact of rising energy costs on households across the UK. That is why, alongside a wider package of measures to support households with energy bills and the cost of living, the government has announced it will be providing a £100 Household Energy Payment for households in council tax bands A to D. This is a one-off payment for this financial year. The core scheme is targeted at properties occupied as a sole or main residence."
Andy Burnham has defended the £100 energy support payment as "real help" when people "need it most" amid criticism it will barely dent soaring bills. The payment to be made to households in council tax bands A to D in January at a cost of £2.6billion was announced in the Budget.
Campaigners and think tanks have described it as badly targeted and too small to protect households from the energy costs rise predicted for January. The left-leaning Resolution Foundation think tank said it was "a terribly, badly targeted kind of support" as there "are lots of people who are doing OK who probably can manage without that money, and probably need to manage without that money if we're going to support the people we need to support at a time when we don't have a lot of money to throw around in the first place".
But the Prime Minister defended the decision to extend the support to "the vast majority" of Britons. Asked about the criticism of the measure during a Thursday visit to a Rolls-Royce factory in Derby, Mr Burnham said: "We're very focused on giving families as much breathing space as we possibly can. Often with a budget, people would have come home from work and said, 'Well, this doesn't help me. It's always for somebody else'. Well, if you're going to give that support to people in council tax bands A to D, that gets to the vast majority of the country. It is help, real help that will land in people's bank accounts in January."
