How does £400 energy bills discount work? When will cost of living payment 2022 be paid - and who will get it
The £400 discount will apply to electricity bills, not gas, and will be paid to some 29 million households in six instalments
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The government support will be issued to some 29 million households in six instalments over a period of six months from October to ensure people have financial support throughout the cold winter months.
The £400 discount is non-repayable and is part of the £37 billion cost of living emergency support scheme set out by former Chancellor Rishi Sunak earlier this year to aid households this winter.
Households in Northern Ireland will also receive a £400 discount on bills through the Northern Ireland Energy Bills Support Scheme (NI EBSS), the same support as is available in Great Britain.
Households, businesses and public sector organisations in the UK will also receive support through a new government Energy Bill Relief Scheme.
The government will provide a discount on wholesale gas and electricity prices for all non-domestic customers whose current gas and electricity prices have been significantly inflated in light of global energy prices. This support will be equivalent to the Energy Price Guarantee put in place for households.
Who will get the £400 discount?
The £400 discount will apply to electricity bills, not gas, and will be paid to some 29 million households in six instalments from October.
All households in England, Scotland and Wales with a domestic electricity connection are eligible to receive the support.
The government said those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over a six-month period from October, totalling £400.
There is no need for households to contact energy suppliers concerning the payment as customers will be automatically eligible.
Households in Northern Ireland will also receive a £400 discount on electricity bills through the Northern Ireland Energy Bills Support Scheme (NI EBSS).
When will the discount be paid?
The £400 discount will be administered by energy suppliers and paid to consumers over a six month period starting from October 2022.
A discount of £66 applied will be applied to household energy bills in October and November, rising to £67 each month from December through to March 2023.
Households will never be asked for their bank details and those with a domestic electricity connection will not need to apply.
The discount will be issued on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card. This means that if a person’s housing circumstances were to change during the six-month period, such as those leaving or moving home, they will still benefit from the relevant portion of the total £400.
This also applies to students and other tenants renting properties with domestic electricity contracts from landlords where fixed energy costs are included in their rental charges. In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.
How will I receive the payment?
Direct Debit customers will receive the discount automatically as a reduction to the monthly Direct Debit amount collected, or as a refund to their bank account following Direct Debit collection during each month of delivery.
Standard credit customers and payment card customers will see the discount automatically applied as a credit to their account in the first week of each month of delivery, with the credit appearing as it would if they had made a payment
Smart prepayment meter customers will see the discount credited directly to their smart prepayment meters in the first week of each month of delivery.
Traditional prepayment meter customers will be provided with redeemable vouchers or Special Action Messages (SAMs) in the first week of each month, issued via SMS text, email or post. Customers will need to take action to redeem these at their usual top-up point.
In all cases, no household should be asked for bank details at any point. Ministers are urging consumers to stay alert of potential scams and report these to the relevant authorities where they are suspected.
Chancellor Kwasi Kwarteng said: “People across the country are understandably worried about the global rise in energy costs, and the pressure this is placing on everyday bills.
“While no government can control global gas prices, we have a responsibility to step in where we can and this significant £400 discount on energy bills we’re providing will go some way to help millions of families over the colder months.
Details of the energy bill discount payment scheme comes as the government launches an online service to help homeowners save money on their energy bills. The new GOV.UK website, originally available through the Simple Energy Advice (SEA) service, offers a breakdown of support available through various schemes and how much financial support households can receive towards energy improvements.