Written answers

Thursday, 17 September 2020

Department of Employment Affairs and Social Protection

Fuel Allowance

Photo of Johnny MythenJohnny Mythen (Wexford, Sinn Fein)
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139. To ask the Minister for Employment Affairs and Social Protection if the fuel allowance will be increased due to the increases in electricity, home heating oil, smokeless fuel and carbon tax and the situation in which persons will have to spend much more time indoors heating their homes in winter 2020/2021 due to Covid-19 restrictions. [24532/20]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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The Government is committed to protecting vulnerable households from the impact of energy costs through a combination of supports, energy efficiency awareness initiatives and investment in programmes, in order to improve the energy efficiency of the housing stock. 

Firstly, under the Supplementary Welfare Allowance scheme, a special heating supplement may be paid to assist people in certain circumstances with special heating requirements.  In addition, exceptional needs payments may be made to help meet an essential, once-off cost which an applicant is unable to meet out of his/her own resources.  

Secondly, my Department also pays an electricity or gas allowance under the Household Benefits scheme, at an estimated cost of €194 million in 2020.   

Thirdly, Fuel Allowance is a payment of €24.50 per week for 28 weeks (a total of €686 each year) from October to April, to an average of c. 352,000 low income households, at an estimated cost of €261.35 million in 2020.  The purpose of this payment is to assist these households with their energy costs.  The allowance represents a contribution towards the energy costs of a household.  It is not intended to meet those costs in full.  Only one allowance is paid per household.  In Budget 2020, the Allowance was increased by €2 per week to €24.50 per week, at an additional annual cost of €21 million.  This increase was funded via a ring-fenced allocation from the circa €90m being raised from the Carbon Tax increase of €6 per tonne (to €26 per tonne) in 2020.  It was the largest single allocation and its purpose was to protect the most vulnerable.  Additionally, because of the Covid-19 emergency, the Fuel Allowance 2019/2020 season was extended by four weeks from 10 April to 8 May 2020, in order to help protect the vulnerable during lockdown, at an additional cost to the Exchequer of €31.5m.  This extension meant that the 2019/2020 Fuel Season ran to the latest end date of any season in the last 30 years.

The Deputy will appreciate that provision of income support is only part of the answer in terms of addressing energy costs.  One of the best ways to tackle energy costs in the long term is to improve the energy efficiency of the dwelling through proper building and household insulation.  In this regard, a total of €52.8 million was also made available in Budget 2020 to retrofit the homes of people in or at risk of energy poverty, through the Warmer Homes Scheme.  This represents the biggest ever allocation for the Warmer Homes Scheme – more than double the initial allocation for 2019.  €13 million of this funding is ring-fenced revenue arising from the increase in the carbon tax.  This reduces the energy required to adequately heat a home, thus reducing a household’s exposure to increases in energy costs.

In terms of the forthcoming budget, the Government will consider how it can support people on low incomes and those on social welfare payments.  The Deputy will be aware that in the context of carbon tax, one of the key pillars of the Government's response is to provide for an avoidance of fuel poverty and to provide allowances, from the funds that would be generated, to enable people to deal with the impact of increased expenditure that they have to incur in their daily lives.  Obviously, any such measures, including any possible increase in Fuel Allowance, can only be considered while taking account of the overall budgetary context and the availability of financial resources. 

I trust that this clarifies the matter for the Deputy.

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