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Small energy providers could soon offer Warm Home Discount

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Written by: Paloma Kubiak
13/04/2016
Small energy suppliers with fewer than 250,000 customers could be forced to offer the Warm Home Discount scheme which gives low income and vulnerable households a £140 electricity rebate.

The Department of Energy & Climate Change (DECC) is considering reducing the participation threshold for suppliers so customers aren’t restricted from getting the payment based on their provider’s size.

Under current rules, for an energy supplier to offer the Warm Home Discount it must have 250,000 customer accounts and there are certain eligibility criteria that users need to meet (see below).

When the scheme was first launched in 2011, only the ‘Big Six’ suppliers – British Gas, EDF, E.On, Npower, Scottish Power and SSE – met the criteria.

But now with the influx of independent suppliers, there are 21 participating providers, according to government statistics.

In a bid to simplify the scheme and with increased competition in the energy space, the government is now consulting whether the threshold should be lowered so more low income and vulnerable people will benefit.

What is the Warm Home Discount and who’s eligible?

The Warm Home Discount is a one-off £140 electricity rebate which is usually paid between September and March each year based on whether you’re a customer of a participating supplier and/or you’re on certain benefits.

To qualify for the discount, you need to meet the below criteria on a specific date in the summer, usually in mid-July:

  • your electricity supplier was part of the scheme
  • your name (or your partner’s) was on the bill
  • you were getting the Guarantee Credit element of Pension Credit, even if you get Savings Credit as well.

You may also qualify if the following apply:  

  • you’re on a low income
  • you get certain means-tested benefits

The money isn’t paid to you, it’s a one-off discount on your electricity bill, regardless of how you pay. If you pay by direct debit or credit, the rebate is taken directly off your bill. If you’re on a prepayment meter, you could receive a top up or voucher for your key or card and if you’ve a smart meter, it’s credited directly.

DECC also confirmed that with energy prices remaining broadly stable over the last two years, the £140 rebate level will remain for the 2016/17 tax year.

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