The Chancellor of the Exchequer announced a further Cost of Living support package on 26 May 2022, and as part of it said the Energy Bills Support Scheme (EBSS) would be doubled to £400 and provided as a non-repayable grant1. The scheme had begun as the Energy Bills Discount, announced on 3 February 2022 as an up-front discount on bills worth £200, which the Government then proposed customers would pay back through bills in later years1. On 1 April 2022 the Government published an explainer renaming it the Energy Bills Support Scheme1.
"he said the EBSS would be doubled to £400 and would now be provided as a non-repayable grant"
Under the amended design, all households with a domestic electricity connection or meter receive the £400 as a credit from their supplier in autumn 2022, automatically and without applying1. The grant is paid over six months from October 2022. Direct debit and credit customers receive it as credit to their account; prepayment meter customers have the money applied to their meter or paid by voucher1. Suppliers must provide each eligible domestic electricity customer they serve on the Qualifying Date, the first day of each delivery month, with either £66 or £67 a month for each month they are eligible1. Traditional prepayment meter customers receive discount vouchers each month by SMS text, email or post, and must redeem them at a usual top-up point such as a PayPoint or Post Office branch1.
The EBSS applies to consumers in England, Scotland and Wales1. For Northern Ireland, the Government said it would fund the Northern Ireland Executive "to provide comparable support with around £150 million through the Barnett formula in financial year 2022 to 2023"1. The consultation response published on 29 July 2022 reconfirmed the England, Scotland and Wales scope and said the Government was "working urgently to ensure that the people of Northern Ireland receive the equivalent support as soon as possible"1.
The £400 is additional to the £150 non-repayable council tax rebate for households liable for council tax in bands A to D in England, expected to benefit 80% of homes in England and paid directly by local authorities from April 20221. Local authorities were given £144 million of discretionary funding for people needing help with energy bills who were not eligible for the council tax rebate, and the devolved administrations received around £715 million for comparable support1.
| Measure | Amount | Scope |
|---|---|---|
| Energy Bills Support Scheme | £400 non-repayable, in six instalments of £66 or £67 | England, Scotland, Wales; comparable support funded in Northern Ireland |
| Council tax rebate | £150 non-repayable | Bands A to D, England |
| Discretionary funding | £144 million | Local authorities, England |
| Devolved comparable support | Around £715 million | Scotland, Wales, Northern Ireland |
Why it matters for households
The change from a repayable discount to a non-repayable grant removed a future liability from household bills: under the February design the £200 would have been recovered through bills in later years, and the May decision both doubled the amount and ended that recovery1. The money arrives as a credit against electricity accounts rather than as cash, so it reduces the balance owed or the amount taken by direct debit over the six months from October 20221. For prepayment customers the route is different and requires action: traditional meter users must redeem monthly vouchers, while smart prepayment customers see the credit applied directly1. Because the grant is tied to a domestic electricity connection, it reached households regardless of how they heat their home, and it sat alongside separate help for those off the mains gas grid1. The context was steep: the price cap rose by 54% in April 2022, and forecasts at the time pointed to a further large increase in October, with Cornwall Insight cited at around £3,580, or 80% above the then current cap1.
What happens next
The Government consulted on technical proposals for the EBSS from 11 April to 23 May 2022 and published its consultation response on 29 July 2022, setting out final policy decisions for delivery1. Alongside that response, BEIS published a draft Secretary of State Direction to suppliers, with a final version to be issued ahead of the scheme's launch1. Ofgem was expected to announce the next price cap level on 26 August 20221.
Sources1 cited
- Energy Bills Support Scheme: Government policy and FAQs - House of Commons Library, commonslibrary.parliament.uk