Energy bill discounts 2022 - what does this mean for OVO Members?


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Updated on 16/06/2022 by Blastoise186

As you may have recently heard, the UK Government has announced changes to the energy bills support package that was announced earlier in the year. But what does this mean for OVO Members and for that matter, the entire market?

Just a quick heads up before I get started. This guide has been created using the latest available data as of 27th May 2022 and is correct as of that date to the best of my ability. If things change again, I will aim to update the details below as soon as possible. If you spot any mistakes though, please leave a comment on this thread or send me a Private Message to let me know and I’ll happily make the correction.

Here’s a full list of all known elements in the latest support package.

£150 Council Tax Rebate

What is it?

A £150 Council Tax Rebate that is being awarded to every household in Council Tax Bands A-D automatically, regardless of whether you actually pay Council Tax or not. Councils may also choose to offer support to other bands at their discretion.

How to get it?

If you’re paying Council Tax via Direct Debit, you’ll receive the rebate automatically as a Giro Bank Credit directly into your bank account. Some people have already received it, with everyone else expected to get it within the next few months. It may take some time for councils to catch up, so please be patient.

If you pay by any other method, your local council will let you know how they intend to apply the rebate.

If you are Council Tax Exempt but your property is in Band A-D, you still qualify for the rebate anyway. Please wait for the council to get in touch and they’ll invite you to apply with further instructions. You don’t need to get in touch with them before then.

Likewise, if you pay less than £150 a year for Council Tax and/or receive the Single Persons Discount, you will still receive the full rebate anyway.

The only households that will NOT be automatically eligible for the rebate are properties in Council Tax Bands E-H, second homes (your main home may still qualify) and empty properties.

There is an exemption though. If you live in a property that’s normally a Band E but has a disability related discount applied that pushes it down to Band D, you will qualify and be eligible for the rebate on the basis that you’re being billed as if you’re in a Band D property.

Please do not contact your energy supplier though, as they’ll be unable to help you with this rebate.

When do I get it?

Payments have already started and councils are doing their best to get the rebates out as quickly as possible. Keep an eye on your bank statements and council tax bills for it!

Do I need to pay it back?

NO. This rebate is non-repayable and you will never be asked to pay it back.

Are there limits as to what I can spend it on?

Nope. While it’s intended to help with energy bills, you are free to spend the money as you wish. If you’d rather use it to pay off some other bill instead for example, please feel free to do that. No-one will ask what you did with the money either. :)

£200 Energy Bill Loan - WITHDRAWN ON 26/05/22

What is it?

This was intended to be an interest free loan to help pay your energy bills. It has since been withdrawn and replaced with the other elements mentioned in this guide.

How to get it?

Sorry, but the £200 Energy Bill Loan is no longer available - please see the £400 Energy Bill Grant below instead.

When do I get it?

It will no longer be paid in this form.

Do I need to pay it back?

Not anymore. The £200 Energy Bill Loan has been withdrawn

Are there limits as to what I can spend it on?

Not anymore because the loan has been scrapped.

£400 Energy Bill Discount Grant

What is it?

A £400 energy bill discount in the form of a non-repayable grant. This grant replaces the previously announced £200 loan

How to get it?

This discount will be automatically applied by your energy supplier. If you’re on a Pay Monthly tariff of any kind, the £400 will be applied to your account credit automatically and you won’t need to do anything.

If you’re on Pay As You Go, your energy supplier will let you know how they intend to apply the credit to your meters. As always, you’ll be welcome to ask for it to be split between both your electric and gas meters in any combination you prefer. It will either be credited directly to your meters if you have a working Smart Meter, or issued as as one or more vouchers that you can take to the shop for when you next top-up.

When do I get it?

This discount will be automatically applied to everyone’s bills from October 2022. You don’t need to request it or contact your energy supplier. It should show up on your bills as an account credit.

Do I need to pay it back?

NO. Unlike the previous £200 loan, this new grant is non-repayable and you will never be asked to pay it back.

Are there limits as to what I can spend it on?

Nope. Ideally, it’s probably best used towards your energy bills as that’s the intended purpose. However, my understanding is that it’ll be your account credit and you can do whatever you want with it.

If you wish to withdraw the money into your bank account instead, please request a refund from your energy supplier via the usual processes. Please bear in mind that you will NOT be able to request it to be cashed out if the £400 discount paid off any debit or debt balances - in these cases it will reduce your debit balance by £400 and may swing your account back into credit. If you have any kind of repayment plans in place to pay off an energy debt, you may also be able to use this £400 credit towards the repayment plan. I’d recommend speaking to your energy supplier to identify the most suitable options in these cases.

Likewise, if you’re on Pay As You Go to repay an energy debt via your prepayment meters, you might be able to have the £400 put directly towards the repayments and clear some of the balance. If your energy supplier agrees to do this, they’ll make the arrangements to put it in place.

£650 Low Income Payments

What is it?

A £650 non-repayable payment to help low-income households on various means tested benefits.

How to get it?

If you receive qualifying benefits, you’ll automatically be eligible with no need to apply. Known qualifying benefits include:

  • Universal Credit
  • Tax Credits e.g. Working Tax Credit and Child Tax Credit
  • Pension Credit
  • “Legacy Benefits” - confirmed as ones like Jobseekers Allowance and Employment And Support Allowance and others that Universal Credit is intended to replace
  • Income based Jobseekers Allowance
  • Income Based Employment and Support Allowance (all phases/types)
  • Income Support

A further £150 will also be paid to anyone on the following disability benefits even if you don’t qualify for the £650 Low Income Payment (and it is possible to get both):

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

Please do not contact your energy supplier though, as they’ll be unable to help you with this payment.

On top of this, it’s reported that pensioners might also get another £300 on top of the above elements, even if they don’t otherwise qualify. I’m not sure exactly what form this will take however.

If you happen to qualify for all three elements of this category, this will make for a combined £1,100 discount.

When do I get it?

Later this year and it will be split into two payments. The first instalment will be paid directly to your bank account in July 2022 with a second instalment in Autumn 2022, also to your bank account. The disability and pensioner elements will be paid from around September 2022 onwards if you qualify, assuming they’re confirmed.

Do I need to pay it back?

NO. These payments are non-repayable and you will never be asked to pay them back.

Are there limits as to what I can spend it on?

Nope. While it’s intended to help with energy bills, you don’t have to use them that way. If you feel you need the money for something else, that’s perfectly OK too.

Any other support?

Yes. This is all on top of the usual schemes like the Warm Home Discount (which from this year onwards, is increased to £150), Winter Fuel Payment, Cold Weather Payments, Priority Services Register and any other schemes run by your energy supplier. All of these discounts and rebates can be stacked on top of each other, which could potentially result in discounts of around £1,500+ for certain households.

It is also worth noting that pretty much all of the payments listed above will be tax-free, exempt from the benefits cap and will not affect benefits awards or eligibility at all - the DWP will consider them as automatic disregards for all benefits purposes. If you’re claiming means tested benefits for example, any payments you get from these support packages will be zero-rated and treated as being worth £0 when calculating what you’re entitled to.

If you still need more help, I’d definitely recommend reaching out to Citizens Advice here. They’re able to offer a huge range of advice on more than just the discounts and rebates mentioned here and are completely independent of your energy supplier. They’ll also be best placed to help you figure out exactly what you’re entitled to and qualify for. :)


15 replies

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Some really helpful information gathered by our community member, @Blastoise186.

 

We’ve announced what we know so far about the new support package over on our Twitter and will of course share more details here as soon as we know more.

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I’ve also just made a few minor updates to the guide:

  • Confirmed exactly which benefits and circumstances are known to qualify for the £650 Low Income Payments
  • Clarified which council tax bands and circumstances will NOT receive the £150 Council Tax Rebate
  • Added notes about means tested benefits
  • Clarified that the disability reduction from Band E → Band D makes you eligible
  • A few other minor fixes and corrections

In the interests of transparency, I will drop further comments if any other changes are made.

Thanks again for your help paying after switching from SSE .. all good 😊

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No worries! Glad I could help.

One more tiny tweak to the guide today. Under the disability element, might → will because I’ve now been able to confirm that the £150 disability payments are definitely a thing. Kudos to meldrewreborn for getting someone in my network to notify me.

The £400 is NOT paid as a lump sum. It will be credited to your energy account over 6 months, in instalments from October 2022 to March 2023. So if OVO credit it in equal instalments that will mean a credit of £66.67 per month for 6 months. There are millions of people out there (thanks to Martin Lewis’s original blog comment - which he has still not apologised for) who wrongly believe they will receive an energy rebate of £400 in October. Even now, weeks after the government announced that it will be paid over 6 months,  many media outlets, including the BBC, are still talking about the £400 we are all going to receive in October. Blastoise186?

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Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

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Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

Hi @Blastoise186

To be completely accurate. 

The government issued a consultation on the approach. 

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

The consultation has suggestions for different types of customers. From the consultation on page 20. 

Direct Debit customers: For direct debit customers, suppliers are normally able to apply a credit to an account within 24 hours. We therefore propose that suppliers will be expected to provide the reduction to direct debit customers by crediting the full amount to customer 
accounts as soon as possible from the qualifying date. Direct debit levels are typically calculated based on a customer’s balance and a forecast of their usage over a 12-month period. However, our intention is for this scheme to benefit customers over the winter months 
and so we are proposing that, where possible, suppliers should look to reprofile customers’ direct debit levels over the six-month period to 31 March 2023 in line with the credited amount.

The consultation is now closed, but feedback is yet to be published and the final design has also yet to be published. 

So for now it is probably not unreasonable to assume most suppliers will pay it over 6 months if they can, until we see the final design from the government. 

 

Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

Hi @Blastoise186

To be completely accurate. 

The government issued a consultation on the approach. 

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

The consultation has suggestions for different types of customers

Direct Debit customers: For direct debit customers, suppliers are normally able to apply a credit to an account within 24 hours. We therefore propose that suppliers will be expected to provide the reduction to direct debit customers by crediting the full amount to customer 
accounts as soon as possible from the qualifying date. Direct debit levels are typically calculated based on a customer’s balance and a forecast of their usage over a 12-month 
period. However, our intention is for this scheme to benefit customers over the winter months 
and so we are proposing that, where possible, suppliers should look to reprofile customers’ 
direct debit levels over the six-month period to 31 March 2023 in line with the credited amount.

 

Hi Jeffus

That consultation was issued in April and refers to the old £200 rebate/loan scheme which has been replaced by the new £400 non-repayable scheme. It remains unclear whether the government expects the suppliers to adopt the approach outlined in this consultation for the new scheme, but articles that I have seen in many publications indicate that the rebate will be spread over 6 months and not credited as a lump sum. The problem is that this government is completely incompetent when it comes to communicating their intentions as to exactly how various schemes will work, which is a clear indication that they are making it up as they go along. We have only to look at the NI protocol and the migrant refugees to Rwanda debacles to confirm this.

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Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

Hi @Blastoise186

To be completely accurate. 

The government issued a consultation on the approach. 

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

The consultation has suggestions for different types of customers

Direct Debit customers: For direct debit customers, suppliers are normally able to apply a credit to an account within 24 hours. We therefore propose that suppliers will be expected to provide the reduction to direct debit customers by crediting the full amount to customer 
accounts as soon as possible from the qualifying date. Direct debit levels are typically calculated based on a customer’s balance and a forecast of their usage over a 12-month 
period. However, our intention is for this scheme to benefit customers over the winter months 
and so we are proposing that, where possible, suppliers should look to reprofile customers’ 
direct debit levels over the six-month period to 31 March 2023 in line with the credited amount.

 

Hi Jeffus

That consultation was issued in April and refers to the old £200 rebate/loan scheme which has been replaced by the new £400 non-repayable scheme. It remains unclear whether the government expects the suppliers to adopt the approach outlined in this consultation for the new scheme, but articles that I have seen in many publications indicate that the rebate will be spread over 6 months and not credited as a lump sum. The problem is that this government is completely incompetent when it comes to communicating their intentions as to exactly how various schemes will work, which is a clear indication that they are making it up as they go along. We have only to look at the NI protocol and the migrant refugees to Rwanda debacles to confirm this.

That is correct the consultation was based on the old scheme design. 

This is the revised scheme details. However it is using the feedback from the old consultation that i posted.  See point 13 on the link below. There are no plans to reissue the consultation. 

https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

 

13. When will we be informed on the final details and design of the scheme?
The fundamental elements of the Scheme are fixed, and we are now working to design the detail of implementation and delivery.

The government response to its recent consultation on the scheme is expected to be published in the Summer.

Various press outlets are assuming the 6 monthly payments for DD customers which is not unreasonable until we know the final design in the Summer

 

 

Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

Hi @Blastoise186

To be completely accurate. 

The government issued a consultation on the approach. 

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

The consultation has suggestions for different types of customers

Direct Debit customers: For direct debit customers, suppliers are normally able to apply a credit to an account within 24 hours. We therefore propose that suppliers will be expected to provide the reduction to direct debit customers by crediting the full amount to customer 
accounts as soon as possible from the qualifying date. Direct debit levels are typically calculated based on a customer’s balance and a forecast of their usage over a 12-month 
period. However, our intention is for this scheme to benefit customers over the winter months 
and so we are proposing that, where possible, suppliers should look to reprofile customers’ 
direct debit levels over the six-month period to 31 March 2023 in line with the credited amount.

 

Hi Jeffus

That consultation was issued in April and refers to the old £200 rebate/loan scheme which has been replaced by the new £400 non-repayable scheme. It remains unclear whether the government expects the suppliers to adopt the approach outlined in this consultation for the new scheme, but articles that I have seen in many publications indicate that the rebate will be spread over 6 months and not credited as a lump sum. The problem is that this government is completely incompetent when it comes to communicating their intentions as to exactly how various schemes will work, which is a clear indication that they are making it up as they go along. We have only to look at the NI protocol and the migrant refugees to Rwanda debacles to confirm this.

That is correct the consultation was based on the old scheme design. 

This is the revised scheme details. However it is using the feedback from the old consultation that i posted.  See point 13 on the link below. There are no plans to reissue the consultation. 

https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

 

13. When will we be informed on the final details and design of the scheme?
The fundamental elements of the Scheme are fixed, and we are now working to design the detail of implementation and delivery.

The government response to its recent consultation on the scheme is expected to be published in the Summer.

Various press outlets are assuming the 6 monthly payments for DD customers which is not unreasonable until we know the final design in the Summer

 

 

Thanks for that extra info Jeffus. The wording in the consultation “... our intention is for this scheme to benefit customers over the winter months ...” is significant and I think we may see the government exerting considerable pressure on the suppliers to credit DD customers with the full £400 in October and to adjust DD payments accordingly. As you say, we will have to wait for the final design in the Summer. “The Summer” is very vague and it is typical of the government to not tie themselves to any sort of deadline and to obfuscate as much as possible. 

Thanks again.

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Hey there @eddie2212 !

Thanks for letting me know about this. Could you provide a source please, as I’ll need to reference and verify one in order to make the updates to the guide.

Thanks for your help!

Hi @Blastoise186

To be completely accurate. 

The government issued a consultation on the approach. 

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

The consultation has suggestions for different types of customers

Direct Debit customers: For direct debit customers, suppliers are normally able to apply a credit to an account within 24 hours. We therefore propose that suppliers will be expected to provide the reduction to direct debit customers by crediting the full amount to customer 
accounts as soon as possible from the qualifying date. Direct debit levels are typically calculated based on a customer’s balance and a forecast of their usage over a 12-month 
period. However, our intention is for this scheme to benefit customers over the winter months 
and so we are proposing that, where possible, suppliers should look to reprofile customers’ 
direct debit levels over the six-month period to 31 March 2023 in line with the credited amount.

 

Hi Jeffus

That consultation was issued in April and refers to the old £200 rebate/loan scheme which has been replaced by the new £400 non-repayable scheme. It remains unclear whether the government expects the suppliers to adopt the approach outlined in this consultation for the new scheme, but articles that I have seen in many publications indicate that the rebate will be spread over 6 months and not credited as a lump sum. The problem is that this government is completely incompetent when it comes to communicating their intentions as to exactly how various schemes will work, which is a clear indication that they are making it up as they go along. We have only to look at the NI protocol and the migrant refugees to Rwanda debacles to confirm this.

That is correct the consultation was based on the old scheme design. 

This is the revised scheme details. However it is using the feedback from the old consultation that i posted.  See point 13 on the link below. There are no plans to reissue the consultation. 

https://www.gov.uk/government/news/energy-bills-support-scheme-explainer

 

13. When will we be informed on the final details and design of the scheme?
The fundamental elements of the Scheme are fixed, and we are now working to design the detail of implementation and delivery.

The government response to its recent consultation on the scheme is expected to be published in the Summer.

Various press outlets are assuming the 6 monthly payments for DD customers which is not unreasonable until we know the final design in the Summer

 

 

Thanks for that extra info Jeffus. The wording in the consultation “... our intention is for this scheme to benefit customers over the winter months ...” is significant and I think we may see the government exerting considerable pressure on the suppliers to credit DD customers with the full £400 in October and to adjust DD payments accordingly. As you say, we will have to wait for the final design in the Summer. “The Summer” is very vague and it is typical of the government to not tie themselves to any sort of deadline and to obfuscate as much as possible. 

Thanks again.

It is a fair comment. 

In some ways not being tied to a date might help.

I really hope we don't see the situation get worse for the people in Ukraine and i hope we don't see further big spikes in wholesale energy costs. But we have to be realistic the estimated price cap increases being assumed for October and particularly January could go even higher. I can't see the government altering the scheme again unless things dramatically change, but there is always the possibility something might need to be done.

I don't know how many OVO customers are already struggling due to the price rises last year and in April and due to Covid, for some people quite a bit of the  £400 may simply go towards paying off existing energy debt. I paid off the OVO energy debt of one of my adopted brothers earlier this year for example. 

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Please note - if like me you are on ‘legacy benefites’ like Working Tax Credit, and are entitled to the £650 Low Income Payment, you will get it from HMRC instead of DWP, and it will be paid a few months later. We are looking at around October and December.

 

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Some good discussion here and definitely points to consider.

I’ll need to do some further research before I can update the guide, but I’ll definitely look into all of this! Usually, I’d go behind the scenes at this point into the private group, but in this case… I think I’ll keep it as public as I can (I did promise transparency after all!).

@Tim_OVO @Jess_OVO I think I’ll need your input as well, if that’s OK with you?

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Hi @Blastoise186 i don't know if a slight wording tweak might be needed to the "£650 Low Income Payments" section. 

One of my younger brothers won't get the £650, but he will get the separate £150 you also mention in the same section as he is on non means tested personal independence payments (PIP). May be worth making clear you can get the £150 without necessarily getting the £650. The £650 you only get if you are on one of several means tested benefits.

Hope that makes sense. 

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Hi @Blastoise186 i don't know if a slight wording tweak might be needed to the "£650 Low Income Payments" section. 

One of my younger brothers won't get the £650, but he will get the separate £150 you also mention in the same section as he is on non means tested personal independence payments (PIP). May be worth making clear you can get the £150 without necessarily getting the £650. The £650 you only get if you are on one of several means tested benefits.

Hope that makes sense. 

Fixed! Thx for the heads up! :)

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