The Welsh Government announced on 19 July 2022 that it is investing £90m in its Fuel Support Scheme, extending a £200 payment to more than 400,000 low-income households in Wales for autumn and winter1. The scheme had previously reached around 166,000 households on universal credit, legacy means-tested benefit and working tax credits1. The extension brings in 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 Scheme1.
The announcement states that households across Wales are struggling to pay higher energy bills, "exacerbated by the increase in the domestic energy cap rise in April"1. The Welsh Government also said it expects "a further rise in the cost of energy and standing charges in the autumn"1. The extended scheme includes £4m announced the previous month for a fuel voucher scheme supporting those on prepayment meters and households not connected to mains gas1.
The £200 payment follows a decision earlier in 2022 to double the 2021/22 Winter Fuel Support Scheme payment from £100 to £200 as the cost-of-living crisis intensified1. Social Justice Minister Jane Hutt said:
"We are targeting the Fuel Support Scheme at low-income households and extending the number of those eligible, as we understand how the winter months can be the hardest of the year and families face the difficult choice of heating or eating."
The scale of the cap rise is set out elsewhere. The House of Commons Library records that typical household energy bills increased by 54% in April 20222. Ofgem confirmed on 4 February 2022 that it was announcing "changes to the cap level from 1 April 2022 that will cover an uplift to the wholesale cost allowance"4. Ofgem had said in October 2021 that the next scheduled cap update was April 20225, and the Commons Library had estimated the cap could rise by between £450 and £6006.
| Item | Figure |
|---|---|
| Welsh Government investment | £90m1 |
| Payment per eligible household | £2001 |
| Households eligible under extension | More than 400,0001 |
| Households reached previously | Around 166,0001 |
| Additional households eligible | Nearly 200,0001 |
| Fuel voucher scheme allocation | £4m1 |
Why it matters for households
The April 2022 cap rise fed directly into the standing charges and unit rates that set a household's bill, and the Welsh announcement treats that rise as the reason more households needed help1. For a home in Wales on a low income, eligibility for the £200 payment turned on which benefit the household received, not on how much energy it used1. Households on prepayment meters and those off the mains gas grid were singled out as most exposed, both to rising unit costs and to standing charges1. The payment is a one-off contribution towards a winter bill; it does not change the underlying price cap level or the wholesale prices that drive it. The Welsh Government controls this scheme under its devolved remit; the cap itself is set by Ofgem for Great Britain, and its coverage in Northern Ireland is a separate question1.
What happens next
The Welsh Government said the payment is intended to help keep homes warm "this autumn and winter"1. It also said a further rise in the cost of energy and standing charges is expected in the autumn1. Ofgem's decision document states that reform changes to the cap methodology "will not be in place until October 2022"4. No further dates for the Fuel Support Scheme were given in the announcement1.
Sources6 cited
- Welsh Government Fuel support scheme extended to more than 400,000 low-income households after £90m investment | GOV.WALES, gov.wales
- Energy policy research: Markets and prices, commonslibrary.parliament.uk
- Cost of living and inflation, commonslibrary.parliament.uk
- Price Cap - Decision on the process for updating the Default Tariff Cap methodology and setting maximum charges, ofgem.gov.uk
- How you’re protected when energy firms collapse | Ofgem, ofgem.gov.uk
- The energy price crunch - House of Commons Library, commonslibrary.parliament.uk