The £400 discount

Spoonie_Turtle

PennineAcute said:

Spoonie_Turtle said:

Astria said:

pochase said:

https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.

That's a bit unclear and contradictory - it says 6 installments, but if you only receive one bill over the 6 month period do you only get one automatic deduction compared to those that get a bill every month ? Or is it more likely that you'll actually get a CREDIT each month, totally £400 over a 6 month period? That would make more sense.

It appears not.

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

• Direct Debit customers: EBSS grants will be provided either as a reduction to the monthly Direct Debit amount collected or as a refund to the customer’s bank account following Direct Debit collection during each month of EBSS delivery. Direct debit dates will remain unchanged"

Crazy.  Totally crazy!

Why?  Reduction in DD is essentially applying credit, just it doesn't sit there in the account showing as credit beforehand.  And for the suppliers that seem incapable of adjusting DDs, a refund surely can be set up to go automatically and will have the same overall effect on the customer's finances.  edit: after having read the consultation response, I take that back, seems it won't happen like that.

  
[I can just see this being reported as a 'reduction in the Direct Debit amount' and people interpreting that as a reduction compared with now, rather than a reduction in what it would have been without the discount *facepalm*]

PennineAcute

Spoonie_Turtle said:

Astria said:

pochase said:

https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.

That's a bit unclear and contradictory - it says 6 installments, but if you only receive one bill over the 6 month period do you only get one automatic deduction compared to those that get a bill every month ? Or is it more likely that you'll actually get a CREDIT each month, totally £400 over a 6 month period? That would make more sense.

It appears not.

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

• Direct Debit customers: EBSS grants will be provided either as a reduction to the monthly Direct Debit amount collected or as a refund to the customer’s bank account following Direct Debit collection during each month of EBSS delivery. Direct debit dates will remain unchanged"

Crazy.  Totally crazy!

Spoonie_Turtle said:

PennineAcute said:

Spoonie_Turtle said:

Astria said:

pochase said:

https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.

That's a bit unclear and contradictory - it says 6 installments, but if you only receive one bill over the 6 month period do you only get one automatic deduction compared to those that get a bill every month ? Or is it more likely that you'll actually get a CREDIT each month, totally £400 over a 6 month period? That would make more sense.

It appears not.

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

• Direct Debit customers: EBSS grants will be provided either as a reduction to the monthly Direct Debit amount collected or as a refund to the customer’s bank account following Direct Debit collection during each month of EBSS delivery. Direct debit dates will remain unchanged"

Crazy.  Totally crazy!

Why?  Reduction in DD is essentially applying credit, just it doesn't sit there in the account showing as credit beforehand.  And for the suppliers that seem incapable of adjusting DDs, a refund surely can be set up to go automatically and will have the same overall effect on the customer's finances.

  
[I can just see this being reported as a 'reduction in the Direct Debit amount' and people interpreting that as a reduction compared with now, rather than a reduction in what it would have been without the discount *facepalm*]

I feel it is crazy for a few reasons.

1)  Whilst every action has a reaction - and people need to take responsibility - we, sadly, cannot all be good at everything - and that includes being good at household accounts.  If DDs are not adjusted before 1 Oct, for people on SVT, then these people will not see the benefit of the £400, if the refunded money is not put back into their enery account. 

I cannot find the link now, but it was saying that even peole bringing in £30K will be in fuel poverty.  Some people will be robbing Peter to pay Paul and may end up in an even worse position than they are now. 

2) Apparently, some companies may take the full DD and then refund the monthly £66, whilst others may take it from the DD.  Whilst there will not be many people paying less than £66, there are some.  My elec DD (fixed tariff until July 23) is £59.  This is not covering my usage - no problems, I thought, as I have the £400 coming.  Either BG will take my £59 and refund me £66 or just refund me £7.   This is just adding complexity - and complexity and energy companies is a dangerous mix.

3) WHD is added as credit, whether you are prepay or on credit meters.  Works a treat and whenever I have had my WHD credited, a quick phone call - or log in, if their system allows it - and my DD is recalculated.  In the grand scale of things, there is not a lot of difference between £150 and £400.

GrumpyTrucker_2

Spoonie_Turtle said:

PennineAcute said:

Spoonie_Turtle said:

Astria said:

pochase said:

https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.

That's a bit unclear and contradictory - it says 6 installments, but if you only receive one bill over the 6 month period do you only get one automatic deduction compared to those that get a bill every month ? Or is it more likely that you'll actually get a CREDIT each month, totally £400 over a 6 month period? That would make more sense.

It appears not.

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

• Direct Debit customers: EBSS grants will be provided either as a reduction to the monthly Direct Debit amount collected or as a refund to the customer’s bank account following Direct Debit collection during each month of EBSS delivery. Direct debit dates will remain unchanged"

Crazy.  Totally crazy!

Why?  Reduction in DD is essentially applying credit, just it doesn't sit there in the account showing as credit beforehand.  And for the suppliers that seem incapable of adjusting DDs, a refund surely can be set up to go automatically and will have the same overall effect on the customer's finances.

  
[I can just see this being reported as a 'reduction in the Direct Debit amount' and people interpreting that as a reduction compared with now, rather than a reduction in what it would have been without the discount *facepalm*]

**Edit added at end**

 I beg to differ with the last part of this. I am currently paying a DD that is almost double my actual usage to build up credit for Winter. As examples let's say I'm using £100 and paying £200.

In October my DD will almost certainly still be £200 since I will be around £600 in credit with my supplier at that point.

Let's say my supplier choose to reduce my DD by £66. That means in October I will only pay £134 into my account. But my useage could be £300 by then, so using £166 of my existing credit instead of £100 as it would have done otherwise. To make sure my credit doesn't drop by more than it should I have to pay that £66 back into the account. Or, let's say the supplier choose to refund £66 after I've paid it. That's just the same as reducing the DD. No benefit to me since I just have then pay that £66 straight back into my account.

Or, to use the example you hinted at, let's say my supplier say my DD should rise to £300 due to increasing prices then they reduce that by £66 to £234. Same thing. I just end up paying less into my account so more comes off my existing credit.

As far as I can see, people paying by DD are only getting their own money back whichever way it's done not extra money / assistance from the government. The only way it can help a DD customer is if it's applied as a credit to the account, even if that account is already in credit.

People on prepayment meters are getting vouchers or a credit applied directly to their meter, but DD customers are being blinded by numbers as they move our own money around to try and fool us into thinking we're receiving help.

To be clear about something: I am on a smart meter and my readings are taken every 30 minutes and my energy is paid on a daily basis off the credit balance in my account. I don't get a monthly bill to pay, my credit balance is effectively an up front payment of which they take my usage.

So, for simplicity, let's say I start with a credit balance of £0 on 30th September. On 1st October I pay a DD of £200 leaving me with £200 in my account. Let's say my usage that month, billed daily, would be £300. That would leave me with a balance of -£100. However if my supplier only take a DD of £134 (or refund me £66) on 1st October yes, I have £66 more in my bank than before but I would only have £134 in my energy account. By the end of the month that would be -£166 instead of -£100. I'd have to put the £66 that I would have paid originally back to the account just to be where I would have been if they had taken the full DD in the first place.

Please, explain how I'm wrong because at the moment I can't see how the proposed approach helps DD customers at all.

**Edit after rethink**

OK, it's possible this may be a terminology thing that, being released by government, isn't surprising. I now think I may have misunderstood the DD thing. After giving myself a headache I think that by DD customers they mean people who pay the full bill each month by DD like you would with, say, Virgin. They'll bill you £300 and either only take £234 or refund £66 a few days later.

Most people I know pay a fixed amount each month into a credit account which I'm now assuming is referred to in the gov press release as "standard credit customers" and so we will see the amount credited to our accounts like the WHD is.

Spoonie_Turtle

GrumpyTrucker_2 said:

Spoonie_Turtle said:

PennineAcute said:

Spoonie_Turtle said:

Astria said:

pochase said:

https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter

Those with a domestic electricity meter point paying for their energy via standard credit, payment card and direct debit will receive an automatic deduction to their bills over the 6 month period – totalling £400.

That's a bit unclear and contradictory - it says 6 installments, but if you only receive one bill over the 6 month period do you only get one automatic deduction compared to those that get a bill every month ? Or is it more likely that you'll actually get a CREDIT each month, totally £400 over a 6 month period? That would make more sense.

It appears not.

https://www.gov.uk/government/consultations/technical-proposals-for-the-energy-bills-support-scheme

• Direct Debit customers: EBSS grants will be provided either as a reduction to the monthly Direct Debit amount collected or as a refund to the customer’s bank account following Direct Debit collection during each month of EBSS delivery. Direct debit dates will remain unchanged"

Crazy.  Totally crazy!

Why?  Reduction in DD is essentially applying credit, just it doesn't sit there in the account showing as credit beforehand.  And for the suppliers that seem incapable of adjusting DDs, a refund surely can be set up to go automatically and will have the same overall effect on the customer's finances.

  
[I can just see this being reported as a 'reduction in the Direct Debit amount' and people interpreting that as a reduction compared with now, rather than a reduction in what it would have been without the discount *facepalm*]

**Edit added at end**

 I beg to differ with the last part of this. I am currently paying a DD that is almost double my actual usage to build up credit for Winter. As examples let's say I'm using £100 and paying £200.

…

As far as I can see, people paying by DD are only getting their own money back whichever way it's done not extra money / assistance from the government. The only way it can help a DD customer is if it's applied as a credit to the account, even if that account is already in credit.

…

Please, explain how I'm wrong because at the moment I can't see how the proposed approach helps DD customers at all.

**Edit after rethink**

OK, it's possible this may be a terminology thing that, being released by government, isn't surprising. I now think I may have misunderstood the DD thing. After giving myself a headache I think that by DD customers they mean people who pay the full bill each month by DD like you would with, say, Virgin. They'll bill you £300 and either only take £234 or refund £66 a few days later.

Most people I know pay a fixed amount each month into a credit account which I'm now assuming is referred to in the gov press release as "standard credit customers" and so we will see the amount credited to our accounts like the WHD is.

*Edit: I now see what you mean by 'standard credit customers' but the press release specifies those customers 'pay on receipt' and separates them from DD customers. … I do not fully understand how payment on receipt works, whether variable DDs count or if it's an entirely different system.   Thinking further, I don't fully understand how discounts on the bill are different from recalculating Direct Debits either.  Maybe a different system, or reduced mistakes if it's recalculated after the energy use each month rather than in advance?*

That's good you can overpay.  People who are already struggling likely aren't able to do so.  But if that means your DD goes in fact down despite the increase in rates, great - my comment was referring to people (in general, not regulars on this forum) misunderstanding, expecting their DD to go down and being shocked when it doesn't.  Just like how people misunderstand the energy cap because of the way it's communicated.

People paying by DD may get some of their own money back if they've hugely overpaid and it isn't eaten up by the increases.  But the simple benefit overall is that the government are paying part of our bill, so we get charged less than we would have done, have to pay less than we would have done, thus the results are either get into less debt, just about manage to stay out of debt, or have more spare money left over.


(My previous comment about setting up refunds was before I'd actually read the consultation response document - I was wrong.)

The original press release did say about credit customers having it credited to their account (and I was also one who thought it would be done that way, akin to how the WHD is credited).  It seems that's also how it was intended originally, but the response from the consultation re: DDs says, in part -

Therefore,  the consultation proposed that  suppliers  will  be  expected  to  provide  the reduction to  direct  debit  customers  by  crediting the full  amount  to  customer  accounts  as  soon as  possible from  the  qualifying  date.
… we  proposed that,  where  possible,  suppliers  should  look  to  reprofile customers’ direct  debit  levels  over  the six-month period to  31 March  2023 in  line  with the  credited amount.

Government response:
…
Following  extensive further  engagement  with  industry,  an alternative approach  has  been developed  based  on reducing  Direct  Debit  payments.   As  set  out  in response to Question 2, payments  will  now  be  made on a  monthly  basis  for  the  six  months  from  October  to March.   The majority  of  suppliers  fed back  that  this  was  a  simpler  and cheaper  mechanism  to implement. To deliver  this  in the  most  straightforward  way,  the  EBSS  payment  will  be applied as  a reduction or  discount  to  the Direct  Debit  amount  collected  by  each  supplier  in  each month  of EBSS  delivery  in line  with the  amounts  set  out  in  the  Scheme framework  (table  1).  Where  the EBSS  payments  is  higher  than the Direct  Debit  amount  to be collected,  the  remaining  balance will  be credited to  the customer’s  account. 

Later parts of the consultation and response deal with pay-on-receipt customers (who will get it credited to their account, as if they had made an additional payment) and pre-payment customers.

PDF available via the link previously posted, or directly here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1095358/energy-bills-support-scheme-government-response.pdf

wild666

It will be the electric bill because everyone needs electricity but not everyone needs gas.

pochase

I would say for 80% the system will work. If you have a credit meter and your gas and electricity are with the same supplier there usually will be only one account, even if they give you separate figures for gas and electricity amounts in the direct debit.

The areas where there will be problems are

- prepaid customers who also need gas if the vouchers can be only used for electricity.
- customers who have gas and electricity with different suppliers
- customers not using gas for heating, but oil, LPG or wood etc

QrizB

pochase said:

The areas where there will be problems are

- prepaid customers who also need gas if the vouchers can be only used for electricity.
- customers who have gas and electricity with different suppliers
- customers not using gas for heating, but oil, LPG or wood etc

Most (not necessarily all) of those customers will be able to claim a refund from their electricity suppliers, and pay it to their gas/oil/LPG suppliers.

pochase

Not saying it is not solvable, it will just not be as straight forward as it is for the rest.

Sea_Shell

If the credit is just deducted off your DD (or refunded to your bank account) how is that actually used towards paying for your USAGE at the higher cap rate!?!   Unless you make extra payments back into your energy account?.

You'll just have paid £400 less, but will still owe that £400 against billed usage.

Especially if your DD isn't set at exactly the correct amount (high enough) to cover your usage on the new cap.... which will probably be lots of people.

pochase

I would assume they are working from the assumption that the normal direct debit will cover the usage.

In this case after you get the £400 back you still have fully paid your energy bill, and you have the £400 back in your pocket, thus having reduced your energy cost.