Dealing with gas and electricity debt: Part 3 — help for clients who are struggling to pay

Recent increases in the energy price cap which influences how much most of us pay for our energy has resulted in huge increases in gas and electricity bills for the majority of UK households. Now more than ever, clients will need advice on how to cope with energy debt.

The first two in this series of three articles which were published in March 2022 looked at liability for energy debt and what happens if your supplier goes out of business. This third article in the series considers the help available to clients who are struggling to pay and was updated on 30 August 2022.

One of the first stages of money advice is to make sure that clients are getting all the income that they are entitled to and to consider ways that they might save on their regular living costs. A full benefit check is essential. We have some general advice on income maximisation on these two public pages:

• get help with the cost of living
• get help with bills

The rest of this article looks at specific help in relation to energy bills.

Energy efficiency measures

Energy efficiency can reduce bills. Suppliers have a duty to fund energy efficiency measures under the Energy Company Obligation (ECO) scheme. Clients on certain benefits, might for example get help with:

• Boiler replacement or repair
• Double glazing
• Cavity wall insulation
• Loft insulation

For more information on energy efficiency have a look at:

• the Government’s Simple Energy Advice website
• the Energy Saving Trust
• The Centre for sustainable energy
• in Wales the Welsh Government’s Nest scheme
• You can also check the energy efficiency tips on our public site

Pay by monthly direct debit

Paying by monthly direct debit can cut bills a little as most suppliers offer a discounted rate for those who pay by direct debit. Payments are usually set to cover the bill over 12 regular payments which can also help with budgeting for those on fixed incomes. Clients who pay quarterly can contact their supplier to see how much they can save by switching to direct debit.

Ofgem has recently strengthened standard licence condition 27.15 which covers the information suppliers should use to set monthly payments so that suppliers to domestic consumers must set direct debits ‘according to the best and most current information available to them’. The new wording applies from 21 October 2022.

Warm Home discount

The Warm home Discount Scheme (WHD) scheme was relaunched in August 2022. Under the new scheme — which will continue until 31 March 2026 — larger energy suppliers must deliver support to households that are considered the most vulnerable. Eligible clients will automatically receive an annual discount of £150 either added to their prepayment meter or taken off their electricity bill. They won’t need to apply.

To be eligible clients need to be claiming certain benefits and be with a supplier that is part of the scheme. You can find details of which benefits count and a list of suppliers on our public page; Grants and benefits to help you pay your energy bills. For a full explanation of the updated scheme you can read Lynette Williams’ Adviser Online article Who will the Warm Home discount help this winter?

Discounts for 2022 are expected during the winter. Suppliers will notify customers when the WHD has been applied. Clients who think they are eligible, but don’t receive confirmation can query this using the WHD helpline. The helpline’s contact details can be found on the WHD government page.

Winter Fuel Payment

The Winter Fuel Payment is an annual one-off payment payable to anyone who has reached pension age in the qualifying week. The qualifying week for winter 2022 to 2023 is 19 to 25 September 2022.

You can usually get a Winter Fuel Payment if you were born on or before 26 September 1955. This year pensioners will automatically get an extra £300 with the usual Winter Fuel Payment. They’ll get the payment in either November or December.

Clients should start getting the Winter Fuel Payment automatically once they reach State Pension age, but sometimes they might need to apply. You can find out how to apply for the Winter Fuel Payment on GOV.UK.

Cold Weather Payments

Cold Weather Payments are one-off payments of £25 paid with certain benefits when it’s very cold — the temperature needs to be at or below zero over 7 consecutive days to trigger the payment which is made automatically.

Clients on the following benefits may be eligible if they meet all the criteria:

• Pension Credit
• Income Support
• income-based Jobseeker’s Allowance
• income-related Employment and Support Allowance
• Universal Credit

The Cold Weather Payment scheme runs from 1 November 2021 to 31 March 2022. Following a bout of cold weather you can check if your client can get a payment in the area where they live.

Cost of living measures introduced for 2022/23

Energy Bills Support Scheme — all households

A payment of £400 per household. This non repayable energy payment will be paid to households in 6 instalments starting from October 2022:

• £66 per month in October and November
• £67 per month in December, January, February and March

For those who pay their bills every month or quarterly suppliers will automatically take the amounts off the energy bill each month.

For those with a prepayment meter suppliers will confirm how customers will get the £400 closer to October 2022. They’ll either:

• automatically add the instalments to the meter
• pay the instalments as vouchers by email, text or post

Households with a domestic electricity connection will be paid automatically and do not need to apply. Clients should enquire with their supplier if they’ve not received their first instalment by the end of October. Clients should be advised that they’ll never be asked for their bank details to receive the energy payment. Anyone concerned about contacts in relation to the scheme should check if this might be a scam.

Tenants who pay their landlord for electricity may benefit from this scheme if the landlord has a domestic supply, however if the landlord has a business contract they won’t get the payment. If a tenant pays their landlord for bills based on energy usage and the landlord has a domestic supply contract the tenant should benefit from the discount. Rules on maximum resale price will apply. If the tenant pays rent inclusive of bills the discount should be passed on to them, Government guidance says “where a fixed cost for energy costs are included in their rental charges, landlords should also be passing on the discounted payments to tenants.”

Houseboats, park homes and off-grid households

The government has confirmed they are working on plans to ensure there is equivalent support of £400 for these households

£650 Cost of Living Payment for those on means tested benefits

Clients will be able to get to a £650 Cost of Living Payment if they are entitled to a means tested benefit on the relevant day. The payment is being split into two instalments. The first instalment of £326 will be paid between July and September 2022.

The client must have either:

• been getting a relevant benefit on or between 26 April 2022 and 25 May 2022
• started a successful benefit claim by 25 May 2022 — or by 26 April 2022 if applying for Universal Credit

The Qualifying date for the second instalment is yet to be announced but is expected to be no later than 31 October 2022.

The qualifying benefits are:

• Universal Credit
• Pension Credit
• Working Tax Credit
• Child Tax Credit
• Income-based Jobseekers Allowance
• Income-related Employment and Support Allowance
• Income Support
• Working tax credit and child tax credit

A benefit check for clients who are struggling with living costs is essential and if successful could trigger the second payment.

£300 Pensioner Cost of Living Payment

Pensioners will automatically get an extra ‘pensioner cost of living payment’ with their usual Winter Fuel Payment in either November or December.

You’re usually entitled to Winter Fuel Payments if you’re of State Pension age in the third week of September. The State Pension age is currently 66.

Clients should start getting the Winter Fuel Payment automatically once they reach State Pension age, but some might need to apply. You can find out how to apply for the Winter Fuel Payment on GOV.UK.

£150 Disability Cost of Living Payment

Those entitled to a relevant disability benefit on the qualifying day can get this one-off payment which is due to be paid in September 2022. They must have either been getting or successfully claimed one of these benefits by 25 May 2022

• Disability Living Allowance
• Personal Independence Payment
• Attendance Allowance
• Armed Forces Independence Payment
• Constant Attendance Allowance
• War Pension Mobility Supplement

The DWP has said that the majority will be paid within two weeks of 20 September 2022. Those whose entitlement to the disability benefit has not yet been determined will still receive a payment if their disability benefit is awarded for a period including 25 May 2022.

It is possible to be eligible for all four cost of living payments. Case example. Annie is a 70 year old bill payer who gets Pension Credit and Attendance Allowance. This autumn/winter Annie will get a total of £1,500 towards her bills:

• £400 Energy Bills Support Scheme
• £650 Cost of living support
• £300 Pensioner Cost of living support
• £150 Disability Cost of living payment

Citizens Advice Consumer Service has created a useful table setting out eligibility for the support measures and when payments can be expected.

Local Government help — in England

Household Support Fund

The UK Government announced a Household Support Fund in September 2021 to help vulnerable households meet daily needs such as food, clothing, and utilities in England. This fund has been extended to March 2023 and is aimed at providing small grants to meet daily needs, such as energy bills, as well as other utilities, housing costs, food and other essentials.

Eligibility varies, as it’s up to the local council to decide, but generally the grant is for vulnerable households, and those in most need of support.The government has issued guidance to Local Authorities to ensure support is targeted towards those most in need of support, including those not eligible for the above Cost of Living Payments.

The guidance requires councils to take into account their public sector equality duty to those with protected characteristics under the Equality Act — see our Equality Act 2010 page.

To find out what your council offers, whether your client might be eligible for support and to apply, contact your local council, You can find out how to contact your local council on GOV.UK.

Local Government help — in Wales

Discretionary Cost of Living Support Scheme

The Welsh Government has established a discretionary Cost of Living Support Scheme under which local authorities can provide support to households in need of assistance with living costs. It’s up to individual local authorities what support they provide, examples may include:

• Payments to households exempt from paying council tax, for example care

leavers

• Payments for separately identified households occupying Houses in Multiple Occupation
• Households who are receiving support services, or living in a refuse or

tempoary accommodation.

Details of available discretionary support will be published on local authorities’ websites.

Discretionary Assistance Fund

The Discretionary Assistance Fund provides two types of grant to support

households:

Emergency Assistance Payment

Supports households with essential costs such as food, gas, electricity, clothing and transport costs in situations such as extreme financial hardship, job losses, or where they are waiting for an initial benefits payment.

Until 31 March 2023, households can access 5 grants over a 12 month period.

Individual Assistance Payment

Provides a grant to support independent living in a new home, and can be used to pay for ‘white goods’ such as a fridge, cooker or washing machine; or home furniture.

Support for Off grid households

The Welsh Government has also extended support available to off-grid households through the Discretionary Assistance Fund until the end of March 2023. This provides households experiencing extreme financial hardship with up to £250 for a one-off oil payment, or up to three £70 payments for Liquefied Petroleum Gas. Information on eligibility criteria and how to apply is available on the WelshGovernment’s website.

Charitable grants

The following energy suppliers are currently offering grants to their customers:

• British Gas Energy Trust — apply for a grant on the British Gas Energy Trust website (you don’t need to be a British Gas customer)
• Scottish Power Hardship Fund — apply for a grant on the Scottish Power Hardship Fund website
• E.ON Energy Fund — apply for a grant on the E.ON Energy Fund website
• E.ON Next Energy Fund — apply for a grant on the E.ON Next Energy Fund website
• EDF Energy Customer Support Fund — apply for a grant on the EDF Energy Customer Support Fund website

Other charitable help may be available to help clients with gas and electricity bills as well as for help with other essential costs and one off payments you can carry out a charity search using www.turn2us.org.uk.

Energy UK has published a list of the support being provided by 10 top energy suppliers.

Fuel vouchers

Clients who are struggling to top up their payment meter and are at risk of disconnection may be able to get a fuel voucher. Citizens Advice has secured fuel voucher funding from the Energy Redress Scheme and is partnering with the Fuel Bank Foundation to provide vouchers to eligible clients. Vouchers are issued in the form of a code in an email or text message that can be redeemed at a local convenience store (signed up to Paypoint) or Post Office (signed up with Payzone).

Clients must receive advice, e.g debt or energy advice to help them manage their energy bills in the future. Fuel Bank Foundation will only issue one voucher per household at any one visit and a maximum of three in any 12 month period.

Support for particular groups

Specialist energy support for older people

While older people can use the services above, Age UK is urging older people to contact it before turning their heating off or down. It says it can check if people are receiving all the support available to them, point people towards more help for heating their home, and provide guidance on billing, meters and complaints. See Age UK advice pages keeping well this winter.

Specialist energy support for disabled people

Scope offers free energy advice to disabled people in England and Wales. Through its disability energy support scheme, it can offer advice on a range of issues, including managing debt, efficiency, accessing benefits, grants and trusts, access to fuel vouchers, understanding bills and support with registering for the Priority Services Register.

Households with other fuel types

In the UK the vast majority of domestic properties are connected to the gas grid, but some four million properties are off-grid and depend on alternative fuel sources for heating and cooking. The price cap only applies to gas and electricity so this means that clients who rely on other forms of energy may also be struggling with rising costs.

• Heating oil — The cost of domestic heating oil tends to fluctuate in response to a variety of factors including Increase in demand, conflict in oil producing countries, distribution and delivery costs, refining costs, exchange rates, weather and the price of crude oil. The rising costs of heating oil will be an issue for large numbers of households, particularly in rural arrears. Clients should be advised to shop around for the best price and price comparison sites can be used. Which? Has advice on getting the best oil prices.
• Liquid petroleum gas (LPG) — According to the trade association Liquid Gas UK, LPG is the fuel of choice for 193,000 homes. If your client is worried they’re paying too much for LPG, it’s worth looking for a cheaper supplier. Liquid Gas UK has a tool to find LPG suppliers. Clients can switch supplier as long as they have LPD supplied into a bulk tank and they’re not within an exclusive contract. You can find advice on switching LPG suppliers on Gov.uk
• Solid fuel (coal and wood) — For those using solid fuel the Solid Fuel association provides helpful information for consumers on energy efficiency and safety advice.

For further reading on dealing with energy debt have a look at the other two articles in this series:

• Part 1 — covers liability for energy debt, protection for vulnerable clients and negotiating an arrears repayment and complaints
• Part 2 — looks at what happens when an energy supplier goes out of business

Written by Lorraine Charlton, with many thanks to Lynette Williams. Lorraine is a debt expert in Citizens Advice Expert Advice Team. Lynette is a consumer expert in Citizens Advice Expert Advice Team.

The information in this article was updated on 30 August 2022.

Unfortunately, we are unable to respond to comments left on the Medium site — please contact expertadvicesupport@citizensadvice.org.uk if you wish to give feedback on an article.