Government plans to issue the £200 energy bills rebate to pre-payment meter customers in £40 vouchers could expose some of the UK’s poorest households to the risk of losing out on support through fraud or theft, an industry expert has warned.
The Department for Business, Energy and Industrial Strategy released a consultation on Monday (11 April) outlining how the support scheme, announced by chancellor of the exchequer Rishi Sunak in February, will work.
Suppliers will be obliged to provide customers with the £200 bill reduction “as quickly as possible” once the scheme comes into force at the beginning of October and no later than six weeks after that date.
For direct debit customers, suppliers will normally be able to apply a credit to their account within 24 hours, the document said.
However, suppliers will not be able to provide credits remotely for prepayment customers who do not have a smart meter.
For these customers, the document said suppliers will be required to provide the £200 payment through other means such as vouchers or special text messages, which can be redeemed when they next top-up.
Five separate vouchers, worth £40 each due to the cap on the amount meters can be topped up, will be sent to customers, which will remain valid until 31 March 2023 so they can be redeemed throughout the winter.
The paper proposed that the reduction can be used to reduce outstanding balance customers owe to their suppliers, meaning they would see no reduction in their electricity bills.
Responding on Twitter to the paper’s publication, Citizens Advice principal policy manager Alex Belsham-Harris wrote that the government’s voucher proposals will “massively” increase the risk of fraud and support not being claimed.
He said the government has prioritised making delivery of support as simple as possible for suppliers but transferred complexity to pre-payment customers, many of whom would lose out on help if their vouchers were lost or stolen.
“The needs to urgently improve the design of the scheme to protect people who prepay or owe to their supplier,” he added.
The government’s paper acknowledged that prepayment customers stand a “greater risk” of missing out on the scheme’s benefits, compared to those who will have credit applied automatically by their supplier.
The consultation also said the government has decided to base the payment on meters, rather than the volume of energy used by customers, in order to keep the scheme as “administratively simple” as possible.
If suppliers go out of business, the paper said a mutualisation mechanism would be needed to spread any outstanding amounts owed through the scheme across existing suppliers.