The Warm Home Discount
The Warm Home Discount (WHD) is a four year scheme that runs from April 2011 to March 2015 to help low income and vulnerable households with energy costs. The scheme will be worth up to £1.1 billion over the four year period and aims to help around 2 million low-income and vulnerable households annually. The funding will come from the participating energy suppliers
There are four elements to the scheme:
Participating energy suppliers are required to give a rebate (£120 in year one, rising gradually to £140 in year four) on their electricity bill to a specified group of their older customers on low incomes. For 2012-13 the rebate amount is £130. The UK Government informs suppliers which households to support through sharing limited data between the Department for Work and Pensions (DWP) and the energy suppliers. The Core Group covers domestic customers where the bill payer, or their partner, is in receipt of Pension Credit. For the first year of the scheme, eligibility was linked to those on the Guarantee Credit element of Pension Credit. This will gradually expand by 2014-15, in terms of age and whether customers are in receipt of the Guarantee Credit only or also the Savings Credit.
Suppliers also have a minimum spending requirement in relation to fixed rebates for a broader group of households (at the same rate as for the Core Group). Support is targeted at low income and vulnerable households who are fuel poor or in a fuel poverty risk group. Participating energy suppliers have discretion over the eligibility criteria for the Broader Group, but still need to target those in or at risk of fuel poverty and their criteria for this and the processes they will use to verify eligibility, are subject to approval from Ofgem.
For the first three years of the scheme energy suppliers can continue to provide support through discounted/social tariffs and rebates. However, the amount of Legacy Spending which a supplier can count towards its Warm Home Discount obligation will be capped, and that cap will reduce gradually over the first three years and to £0 in year four.
With approval of Ofgem an obligated supplier may count a maximum of £30m spent on industry initiatives towards its non-core spending in any year of the scheme. Industry initiatives are energy supplier-funded programmes and partnerships which assist those in or at risk of fuel poverty with a range of support, including benefit entitlement checks, debt advice and energy efficiency measures.
For a review on how the Warm Home Discount is progressing see:
For more information on the Warm Home Discount Scheme, including how to claim, visit GOV.uk