Government proceeding with Warm Home Discount changes

A new Core Group 2 will be created to replace the Broader Group, with changes to eligibility set to be introduced.

Customers in receipt of at least one of eight means-tested benefits and with high energy costs would be eligible.

However, disability benefits are left out of the eligibility benefits and the Government has stopped short of mandating an Industry Initiative to provide disabled customers in fuel poverty with support.

Core Group 2

The major change in the Warm Home Discount scheme is the new Core Group 2, set to replace the Broader Group we discuss in our guide to winter fuel bills help. The current Core Group will be renamed as Core Group 1 for clarity.

Customers who fall into Core Group 2 will receive their rebates automatically as customers in Core Group 1 do, ensuring that they do not need to apply directly and are therefore more likely to access the discount.

The Government say 1.9 million people would be eligible for a Core Group 2 rebate each year, an increase of around 750,000 compared to the existing Broader Group.

To be eligible, customers will need to have high energy costs with calculations based on the type and age of their property and the floor area. They will also need to be in receipt of one of the following means-tested benefits:

• Income related Employment and Support Allowance
• Income based Jobseeker's Allowance
• Income Support
• Housing Benefit
• Universal Credit
• Child Tax Credits
• Working Tax Credits
• Pension Credit Savings Credit

The Government say this approach will enable them to better target fuel poor households.

Disabled customers

Disability Living Allowance (DLA), Personal Independence Payments (PIP) and Attendance Allowance (AA) are non-means-tested benefits that are excluded from the new eligibility criteria for Core Group 2.

The Government argue that it would be an inefficient method of targeted fuel poor households as being in receipt of one of those benefits does not mean a recipient is struggling to pay their bills.

They also say that 62% of DLA and PIP recipients could fall into one of the other benefit categories listed above.

An Impact Assessment estimates that more people with disabilities and health conditions will receive a rebate (12%) compared to the existing criteria, yet there will be a significant reduction in the number of rebate recipients who receive DLA or PIP (35%).

There was a separate consultation question about creating an Industry Initiative to ensure there is dedicated support for households where a disabled person is at risk of fuel poverty.

It was concluded that, while there was a majority of support for the proposal, existing Industry Initiatives enable suppliers to support their disabled customers already and the Government does not want to impose quotas on how much support goes to disabled people.

However, suppliers will be required to monitor how much support they give to fuel poor disabled customers and submit data as part of their annual Ofgem reporting.

Warn Home Discount

The consultation responses offered by the Government are in relation to how many recipients the rebate will cover and how it will be administered.

We also know that the Warm Home Discount will be boosted by £10 later this year to be worth a total of £150 per year. This was confirmed by the Chancellor in his package of measures to help energy customers faced with rising bills.

However, with bills rising by 54% this month and then projected to rise by more than 60% in October 2022, the difference an extra £10 will make to fuel poor households this winter is debatable.

Research from Citizens Advice published last month found than 14.5 million people will be unable to afford their energy bills in the autumn - and even the expanded Warm Home Discount will only cover 2.8 million households.