Rishi Sunak announced a series of payments to households in the UK struggling with the deepening cost of living crisis last week.
The chancellor confirmed the introduction of a “contingency tax” for energy giants and doubled the existing discount of 200 pounds.
This comes after Ofgem CEO Jonathan Brierley said the energy price cap could increase by another £ 830 to £ 2,800 in October.
Here’s what you need to know.
What is the discount for the energy bill?
The original plan, announced earlier this year, was for households to receive a £ 200 discount on their energy bills in October, with the government covering the costs.
This discount would be paid for five years from 2023, with customers paying an additional £ 40 for their bills each year.
However, on Thursday the chancellor announced that the discount would be increased to £ 400 and he would no longer have to return.
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Who is entitled to the £ 400 discount?
All households in England, Scotland and Wales will receive the £ 400 payment to offset the sharp increase in energy bills from October.
Every household with a household electrical connection will automatically be eligible for the grant.
When will I receive the money?
Energy suppliers will send the money to households with a home electricity meter for six months from October.
For customers with direct debit and credit the money will be credited to their account, while for customers with prepaid meters the money will be added to their number or will be paid through a voucher.
What else did Rishi Sunak announce?
The £ 650 payment was one of a series of measures announced by the Chancellor:
Contingency tax
Al, although Mr Sunak did not use the word ‘unforeseen income’ after spending months in opposition to that move, he declared a ‘tax on energy gains’ to raise around £ 5 billion in one year.
This temporary one-off tax will hit oil and gas companies with 25 percent of the huge profits that have risen due to the invasion of Ukraine and the coronavirus pandemic.
An 80 per cent investment margin has also been announced to calm the Conservative Party’s nerves that the move will hamper North Sea companies’ investment to save them 91 pence for every £ 1 they spend.
£ 650 means tested payment
Mr Sunak also announced a one-off payment of £ 650 to help some of the most vulnerable people in the UK.
According to government guidelines, the £ 650 payment will be given to more than eight million households receiving the following means-tested benefits:
- Universal credit
- Allowance for job seekers based on income
- Work allowance and income support
- Income support
- Working tax credit
- Tax credit for children
- Pension loan
Targeted measures
Separate one-off payments of £ 300 will also go to pensioners and £ 150 to those receiving disability benefits.
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