The Minister for Finance and Local Government announced on 15 February 2022 that a further £90m would be made available to run another fuel support scheme in Wales1. The announcement followed the decision by the Minister for Social Justice on 1 February 2022 to double the payment under the earlier Winter Fuel Support Scheme from £100 to £200 as the cost-of-living crisis intensified1.
The £90m formed part of a cost-of-living package worth more than £330m across 2021 to 2022 and 2022 to 2023, which also included £150m for the Cost of Living Support Scheme1. The Welsh Government carried forward £180m of funding from 2021 to 2022 outside the normal Wales Reserve arrangements to respond to the crisis1. Under the new scheme, households that qualify are issued a £200 BACS payment, and in two authority areas households identified as eligible through the Council Tax Reduction Scheme receive All-Pay vouchers redeemable for cash at a post office1. The scheme pays once per household, to the person who pays the fuel bill, regardless of how many people in that household are on benefits1.
Eligibility was widened beyond the previous criteria. The Welsh Government said nearly 200,000 more households on child tax credits, pension credits, disability benefits, carers allowance, contributory benefits and those receiving help through the Council Tax Reduction Scheme would now be eligible1. Officials estimated 427,447 eligible households using DWP data showing 60% of Universal Credit benefit households claim the housing element, and anticipated around 422,000 households would be eligible under the extended criteria1. A later, more conservative estimate of 85% take-up among the Council Tax Reduction Scheme cohort and 75% of manual payments gave 345,346 payments and a forecast total cost of £71,313,846, implying an underspend of about £18m against the £90m budget1. Of that underspend, £2.4m was agreed for cost-of-living work and a further £4m for the Fuel Bank Foundation Fund, leaving a forecast underspend of approximately £11.5m1.
Administration fees were changed to reflect reduced demands on local authorities: £5 for processing a Council Tax Reduction Scheme case and £9 for those not in receipt of it, giving a mean average application fee of £6.50 against the previous £9 flat rate1. The Department for Work and Pensions and HM Revenue and Customs approved the scheme as Local Welfare Provision, meaning it can be disregarded in the assessment of tax and any means-tested benefit received by the household1.
"The Minister for Finance has made available £90m for this year's Welsh Government Fuel Support Scheme"
The document records that the earlier Winter Fuel Support Scheme opened on 13 December 2021 and closed on 28 February 2022, with final payments made on 30 April; 166,780 households claimed it at a cost of £35,455,925, equivalent to 45% of the 364,264 households originally estimated as eligible1. It also notes that the data used to forecast maximum eligibility for that first scheme may have produced an inflated take-up estimate1. On energy prices, it records that Ofgem raised the domestic price cap by 54% in April 2022, that the UK Government announced a £2,500 cap over two years on 8 September, and that the Chancellor said the cap would rise from £2,500 to £3,000 for a further 12 months from April 20231. The Welsh fuel poverty measure estimate put 45% of Welsh households, or 614,000, in fuel poverty following the April 2022 price rise1.
Why it matters for households
The scheme was a cash payment towards fuel costs rather than a change to how a home is heated or insulated, so it did not alter a household's underlying energy use or dependence on the grid and delivered fuels. Its significance for energy independence lies in who could receive it and how it was paid. The extension brought in groups excluded from the first scheme, including households on disability benefits, carers allowance and contributory benefits, and those receiving help with council tax1. Payment by BACS, or by All-Pay voucher in two authority areas, meant money reached households without an application in some cases, since local authorities were asked to process bank details already held from the Council Tax Reduction Scheme, the previous Winter Fuel Support Scheme or the Unpaid Carers Payment1. Where that was not possible, households applied through their local authority website, by phone or by post on request1. The treatment as Local Welfare Provision meant the payment did not reduce means-tested benefits or count as taxable income1. The document notes uncertainty over whether UK Government departments would continue to accept the scheme as local welfare provision if it ran again in 2023 to 2024, when it might be viewed as an annual payment and treated as taxable income or deducted from benefits1. For households weighing up grants and schemes for home energy improvements, this payment was separate from insulation and heating grant funding; the differences between current grant routes are set out in Warm Homes: Local Grant vs Great British Insulation Scheme.
What happens next
The impact assessment, published on 18 July 2023, records no formal arrangements to evaluate the scheme, describing it as anticipated to be a one-off payment addressing immediate short-term financial pressures1. It states that a review of lessons from the first scheme informed the development of the 2022 to 2023 Welsh Government Fuel Support Scheme1. No further scheme for 2023 to 2024 is confirmed in the document, which notes only that it is uncertain whether such a payment would again be accepted as local welfare provision1.