What's the Warm Home Discount?
Everybody deserves a safe and warm home during bitterly cold winters. However, low-income households spend a higher percentage of their income on energy bills, so they sometimes find themselves at risk of not being able to pay power bills. Recognizing that such setups were unacceptable, the United Kingdom decided to enact the Warm Home Discount.
You may have heard that there’s relief on energy bill payments to certain income groups in the UK known as the Warm Home Discount. Do you know if you’re eligible or how to receive the benefits? Programs like these that help alleviate the high burden of powering a home for lower income households are immensely important. However, unless the people who can benefit the most from them take advantage then they won’t achieve their potential.
With that in mind, let’s take a look at what the Warm Home Discount is, who’s eligible, and how to apply for this relief.
Context of the Warm Home Discount
The Warm Home Discount was introduced in 2011 by UK government as a rebate on electricity bills, funded by participating energy suppliers and their consumers, as a support system for customers who needed assistance and a method to fight fuel poverty. This plan replaced a previous voluntary social tariff offered by energy suppliers, and offered £120 to customers in the first three years and increasing to £140 in its fourth year. While the plan was originally intended to end in 2015, it has proven successful and has been extended multiple times. Currently, the Warm Home Discount is on the books through the winter of 2020-2021.
The motivation for the Warm Home Discount is to provide social price support for communities that are most vulnerable due to lower incomes. Energy suppliers are compelled to participate if they have an excess of 250,000 customers, while any suppliers who have fewer customers are permitted to take part if they so choose.
Who is Eligible?
Since its original iteration, the Warm Home Discount was designed to provide assistance to the so-called ‘core group’ of pensioner households who were persisting on low incomes (assuming they were in receipt of the guaranteed element of pension credit) and the ‘broader group’ of low income households that energy suppliers themselves were able to define for themselves. For example, British Gas defines participants eligible for their Broader Group as households who are existing customers and:
Have a child of 5 years old or under, or a child with a disability, and currently receiving at least one of the following government benefits:
Income based Jobseekers’ Allowance
Income related Employment and Support Allowance
Have a child under 5 years of age, a person of pensionable age, or a household member with a mental or physical disability or illness while the gross household income is below £16,190
Spend 10% or more of household income on energy bills for heat while bringing in a gross annual income of less than £16,190
Of course, this is just one energy supplier’s set of criteria, so it’ll vary depending on which utility you contact. However, that gives an idea of the type of hardships that might define the broader group.
An early analysis of the success of the Warm Home Discount found that up to 2 million homes received the support annually. Such high rates of adoption speak to the value of the program and the value in provides these otherwise vulnerable households.
Claiming Your Discount
For qualifying households, the Warm Home Discount Scheme is provided in the form of a discount on their electricity bills, not any payment made directly to the customer. While many households rely on natural gas rather than electricity for their home heating, not every household has a gas provider (such as homes that use electricity for their home heating).
That is why the discount would go on your electric bill specifically. There were early concerns that this setup ensured that those who did not have a contract themselves with energy suppliers, such as residents in park homes whose electricity is supplied by the landlord, would not be eligible. That being said, the UK government ensured that such loopholes were closed during the 2016 extension of the program.
If you believe you’re a qualified recipient for the Warm Home Discount, you can apply directly with your energy supplier. Since the energy suppliers are the ones determining eligibility, funding, and providing the rebates under the Warm Home Discount, they are the best ones to answer any questions you may have.