Thousands of the country’s poorest families will not see their benefits cut if energy companies want to take more money, the Department for Work and Pensions (DWP) has confirmed.
Households that pay for their energy directly on their benefits will not have the energy increases automatically deducted from their payments for the following year.
The DWP said the temporary freeze means it will not consider automatic requests for increased payments from energy suppliers, even if a bill has gone up. The change means that even if your energy bill increases, your benefit payments will remain stable and at the same rate, although you will still have to pay any extras your energy company charges you.
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This should be done either by paying any extra directly to your utility company or by asking the DWP to increase your payment from your benefit money.
The idea of the automatic raise freeze is to give struggling families time to talk to their energy provider to discuss other payment options. Only the recipients themselves will be able to increase the amount coming directly from their allowances.
Around 100,000 people claiming Universal Credit, Jobseeker’s Allowance, Employment Support Allowance, Income Support and Pension Credit pay energy costs directly from their allowance. in a scheme called Fuel Direct, or third-party deductions.
The Fuel Direct program is there to help vulnerable customers who find themselves in debt and have no other way to pay what they owe. Under this program, the DWP agrees on an amount to be withdrawn each month from a person’s benefit payments to cover debt and running costs, and pays the money directly to the claimant’s energy provider.
Around 100,000 people are paying direct and will now have to make arrangements with their energy supplier to meet rising costs due to the increased energy price cap.
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David Rutley, Minister for Social Care, said: ‘This is another practical change on top of support through our £1billion household support fund, lower fuel tax and the reimbursement of energy bills that help all people meet their daily expenses. Budget requirements differ from household to household and this change allows people to maximize their benefit payment based on their needs while capitalizing on other available supports.
The DWP will also not process applications from new energy providers for ongoing payments where an arrangement is not already in place. But he will consider making deductions for arrears that are lower, fixed amounts that prevent further enforcement from being sought.