With energy prices surging, it was no surprise that the Government's fuel allowance was of interest to a lot of readers as they digested Budget 2022. The allowance jumped €5 in the budget to €33 a week. And unlike the other welfare increases announced, it will kick in immediately, not in January 2022. But how does it work and who qualifies?
What is the fuel allowance?
The fuel allowance is a weekly payment made to help defray winter heating bills for older people or those on limited financial means. It is paid for 28 weeks, or just over half the year. This autumn, the payment kicked in on September 27th and will run to April 10th, 2022. At the new €33 rate, that’s €924 in financial support to ease the pressure from heating bills. The allowance is paid either weekly, or in two lump sums – one in September and the other in January.
Why is it so topical this year?
Energy prices have jumped close to 50 per cent this year and, with large heating bills looming over the next few months, many people are understandably concerned as to how they will meet the cost, or whether they will be forced to sit in the cold or, worse still, be disconnected for non-payment.
What changes were made in Budget 2022?
Three changes were brought in, two of which were designed to widen the scope of the scheme so that it covers more vulnerable people.
First up, the payment was increased by €5 in line with increases in other welfare payments. However, given the size of the payment, that is an inflation busting increase of almost 18 per cent – far higher than for any other welfare payment.
And, recognising that those higher energy prices are already feeding through to most people’s bills, the increase comes into effect immediately where you will have to wait until January for other welfare payment increases.
I get paid via lump sum. Will I lose out on part of this increase?
No, you won't. The Department of Social Protection assures me that it will be paying arrears to those who are being paid by lump sum. Quite when is not yet clear. The arrears will cover the period from the Wednesday after Budget Day to the date in January when the second lump sum becomes payable.
You mentioned broadening the base of those eligible for the allowance?
The other two budget measures do that. First up, the means-tested amount you can earn over and above welfare payments has been increased by 20 per cent to €120 a week. However, this measure will only kick in in January so, if you are looking for the allowance this autumn, the income threshold is still €100. We’ll come back to this in a minute.
Separately, people in receipt of jobseeker’s allowance or supplementary welfare allowance may qualify for fuel allowance after 12 months, instead of 15 at present. But this will only really benefit people next winter as it does not come into force until next September.
So who’s eligible for it then?
There are three criteria. First, you must be living alone in Ireland, or living with someone (see below). Second you must be in receipt of certain specific welfare payments. And third, you must meet an income test.
So let’s take those in order. You can live with someone else in specific circumstances?
Yes, but that other person needs to be either your dependent spouse or partner and/or dependent children. A person in receipt of the carer’s allowance who is looking after you or a dependent spouse/partner on a full-time basis is also okay, as is someone in receipt of the pandemic unemployment payment (PUP), short-term jobseeker’s allowance or a basic supplementary welfare allowance. Finally, if you are living with someone who would qualify for the fuel allowance in their own right, that’s also fine. But, bear in mind, a household can only receive one fuel allowance.
And what welfare payments qualify you?
Qualifying social insurance payments are the contributory State pension, the widow(er)’s or surviving civil partner’s pension or an equivalent pension from another EU state, the invalidity pension, the blind pension, the contributory guardian’s payment, or death benefit under the occupational injuries scheme or incapacity supplement under the occupational injuries benefit scheme.
You can also qualify if you are on any of the following means-tested social assistance payments: a non-contributory State pension or widow(er)/surviving civil partner’s pension, disability allowance, deserted wife’s benefit or allowance; the one-parent family payment; the non-contributory guardian’s payment, the farm assist programme, the basic supplementary welfare or jobseeker’s allowance (both after a certain period), the jobseeker’s transitional payment and, in certain circumstance, the back to work allowance, back to work enterprise allowance, the rural social scheme, Tús or community employment.
Which brings us to the means test?
If you’re already on a means-tested payment, you are likely to be nodded through. Otherwise, to qualify, your income is limited to the maximum State pension payment (currently €248.30, but rising to €253.30 in January) including any increases that you might get for your age, living alone and dependants, plus €100 (rising to €120 in January).
And what is assessed in the means test?
First, there’s the household income, though certain things are excluded, including PUP payment, child benefit, compensation payments from the Stardust, Magdalene or Hepatitis C commissions, State payments for guardians or foster parents and a number of means-tested welfare payments.
They also look at any savings, investment or property you own, apart from your home. The first €20,000 of these assets are ignored, the next €10,000 is assessed as delivering €1 of income per week per €1,000. This rises to €2 per €1,000 on assets between €30,000 and €40,000, and to €4 a week for every €1,000 of assets above €40,000.
Generally, all the assets in a joint account will be used in the assessment of your means even if you effective own only some of that money.
How do I apply?
You'll find a fuel allowance application form (form NFS1) at gov.ie. That page will also tell you where to send the form – unhelpfully that differs depending on the welfare payment you're in receipt of.
And do I have to reapply each year?
No. Unless your circumstances change, if you are approved for the payment, you will continue to receive it in successive years.
