Households with a low income could potentially miss out on a £120 discount from their home energy bills due to funding limits imposed by energy companies.
The Warm Home Discount was introduced earlier this year as a replacement for some existing social tariffs to help people facing fuel poverty. It is expected that approximately 600,000 pensioners will benefit from the discount this year.
Pensioners automatically qualify for the Warm Home Discount if they receive the Guaranteed element of their Pension Credit entitlement. The government will issue a letter to those who qualify to explain their entitlement and how to claim it.
Others who automatically qualify are people on a means tested benefit such as income support or job seekers allowance and those who have a child under the age of 5 or a disabled household member. It is expected that this could mean a further 900,000 people could qualify for the scheme. However, many people could miss out.
The government guidelines for the scheme indicate that energy companies should help a ‘broader group’ of people struggling with with their energy bills. However, they also allow for a degree of discretion for them to decide who qualifies for the discount.
The majority of the six major energy suppliers for the UK have indicated that they would cap the number of people they could offer the discount to. The money available to fund the scheme is limited and many have suggested the discounts would be allocated on a first come first serve basis.
Statements from E.on and nPower indicated that whilst they would help as many people as possible, they could not commit to helping all who qualify for the scheme. EDF have set a cap of between 40,000 and 45,000 customers who they would assist, although they also indicated that they didn’t expect to reach this limit. Scottish Power are still negotiating with Ofgem over how many people they would help.
Scottish and Southern Energy have indicated that they will not be placing a cap on the number of customers who will be eligible for the scheme. They have also been proactive in their steps to encourage people to claim, making efforts to contact customers through groups such as the Citizens Advice Bureau.
British Gas have also guaranteed that any customer who qualifies for a discount will receive it if they apply before the end of January this year. They also have a broader qualification criteria.
Customers whose household income is below £16,190 and who spend over 10% of their income on heating their home will be invited to apply for a discount.
Greg Barker, the Energy Minister for the coalition government, is encouraging the other energy suppliers to follow the standards set by British Gas.
Jonathan Stearn from Consumer Focus has called for a clear strategy to address the problems of energy efficiency and fuel poverty. He said: “If energy firms are able to offer help to more people, as British Gas has said it will be doing, this would clearly be good news. It is welcome that the Minister has said he will be putting pressure on other firms to follow suit, as consumers need all the help they can get to make ends meet.”