ENERGY bills are rocketing and the government has announced a scheme that will give billpayers a £200 rebate to help.
The money off bills will be applied in October – but it will then have to be repaid when energy prices are (hopefully) lower.
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The money will be paid back as an extra £40 payment a year on energy bills from April 2023 onwards.
The rebate is clawed back over five years but it’s not really a loan, as it’s not given to you and personally.
Martin Lewis, who has called for the scheme to be scrapped altogether, has likened it to a levy.
The money saving expert said: “First there’s a negative levy reducing bills, then a levy added to them.”
The full details of the scheme are yet to be announced, it’s lead to some confusion about how exactly it works.
For anyone whose circumstances stay the same it will “feel like a £200 loan repaid at £40/year”. But “there are bizarre outcomes” for others, Martin said.
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A quirk of the scheme appears to mean that two single people living alone in October will each get the £200 off bills.
If they then move in together and are paying a single bill, they will only be paying back £40 a year between them.
It means that they will repay only half the cash.
We’ve asked the Treasury how this will work and who else it could apply to and will update when we hear back.
The government has launched a consultation to work through the finer details of the scheme, so there could still be terms that stop this loophole.
“BIZARRE OUTCOMES”
The quirk is based on the fact that it’s the bill itself that the rebates and repayment applies too.
So if you pay a bill in October you’ll get the discount applied.
But if you don’t pay a bill for some reason later on when repayments are added, or you share it with more people, you could end up paying back less or none at all.
Equally, some people may not get the rebate because they don’t pay a bill in October, but then have to pay back the money later on.
For instance, if someone lives at home with their parents, and then moves out.
The terms and conditions of the scheme could still be drafted so that this loophole is addressed.
Others who potentially stand to benefit are people whose situations change, and they go from paying a bill to not paying a bill.
This could be:
- Someone who moves back in with parents
- Someone who moves from living alone to a house share with other people
- Pensioners who move into a care home
- Anyone who moves abroad
The government also announced a £150 discount on council tax bills to help ease the cost of living – and you won’t have to pay it back.
Here’s who will get the help and when you can expect the payment.
The extra help comes as the cost of living rockets. Here’s six ways you could beat hikes.
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