Energy bill and council tax rebates explained: all your questions answered
MILLIONS of households have been promised state-backed payments worth £350 to help cope with the cost of living crisis.
The Treasury this week unveiled energy loans worth £200 and a £150 council tax rebate - we answer your key questions on this support.
Households were hit with a double whammy of energy price and interest rate rises this week.
Industry regulator Ofgem announced that the energy price cap will rise by £693 in April to £1,971.
The Bank of England also hiked interest rates by 0.25% to 0.5% as it tries to stem rising inflation with the cost of livign at a 30-year high.
The government is also trying to help with household bills.
Chancellor Rishi Sunak this week unveiled a £200 energy loan to support households with rising gas and electricity bills.
He also announced £150 rebates on council tax.
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Here are some of the key questions and answers on these attempts to tackle the cost of living crunch.
Energy bills
Who will receive the £200 energy loan?
The £200 energy payments will be applied to all domestic energy customer accounts from October.
You don't have to do anything to receive it as the government will provide funding to all suppliers for them to pass on to customers.
It is only available for residential households so businesses will miss out.
Households on communal shared heating systems that are chosen by their freeholder may also be excluded as they are treated as commercial customers.
There will be a government consultation in the spring on how this system will work.
How is the £200 energy loan repaid?
The energy payments are loans rather than free money and will need to be repaid.
Customers will pay back the discount automatically in equal instalments of £40 a year over five years from April 2023 when wholesale gas prices are expected to come down.
This is expected to be reflected as an increase to standing charges on bills,the Treasury said.
Can you refuse the £200 energy loan?
Some critics have said it is unfair that they are being saddled with extra charges in the future.
It is not possible to refuse the £200 energy payments though as they due to be applied by energy suppliers on customer accounts automatically.
Mr Sunak told the Martin Lewis Money Show last night that there will be no option to opt-out.
He said: "You shouldn't view it as debt, it's £200 off your bill, there's no interest charged on that.
"The £200 you've got you put that aside and probably make a little bit of money."
Could you pay more than the price cap?
The energy price cap is set to rise from £1,277 to £1,971 in April.
The cap is meant to limit bill increases for the 22million customers on default standard variable tariffs.
But the figure is actually just an average for a typical household and the cap is not on your energy bill but is applied to the unit and standing charges that are set by the supplier.
So if you use more energy, you could end up paying more than the cap.
From April 1, the equivalent per unit level of the price cap to the nearest pence for a typical customer paying by direct consdebit will be 28p per kilowatt hour (kWh) for electricity customers and 7p per kWh for gas customers
What if you are a pre-payment meter customer?
Pre-payment customers also have their own price cap but it is higher than those who pay by direct debit.
Prepayment customers will see an increase of £708 from £1,309 to £2,017 in April.
These types of energy users will also be eligible for the energy loans and will receive credit either as a voucher, cheque or it could be accounted for through a smart meter if you have one.
This process should be detailed in the government consultation on the measures this spring.
What help is available if you can't pay your bills?
There is help available if you are still struggling to pay your energy bills.
It is worth speaking with your supplier about any support or grants they can provide, especially if you or someone you live with is on a low income or vulnerable.
Some local councils may also be able to provide household support grants.
Find your local authority by using the
Check if you are missing any benefits such as the Warm Home Discount - which gives you £140 off energy bills.
People on certain benefits can also get Cold Weather Payments of £25 a year when the temperature drops.
Council tax rebate
Who gets the council tax rebate?
More than 15million households, or 80% of homes, are expected to get the council tax refund, with both low income and middle income families set to benefit.
Anyone living and paying council tax in properties in valuation bands A to D in England will receive the £150 rebate.
You can find out your council tax band by checking with your local authority or on the postcode checker.
Anyone living in pricier properties in council tax bands E to H or those who do not pay council tax will not get the rebate.
Council tax payments are arranged separately in Scotland, Wales and Northern Ireland so households living in these countries will have to wait to see if they will get their own version of the rebates.
It is possible to challenge your council tax band if you think you are paying too much.
You can apply for a reduction through the .
When will the council tax rebate be sent?
The rebate will be automatically applied to council tax bills from this April, which is the beginning of the new financial year and when the latest local authority charges typically land on doormats.
The Treasury said the majority of people who pay by Direct Debit will receive this money in April.
For households in Bands A-D who do not pay by Direct Debit, their councils will be ready to process their claims in April, the government said.
The Treasury said it may take a bit longer for those with council tax bills lower than £150 a month but all households should see the full benefit by May.
Does the council tax rebate have to be repaid?
Unlike the energy loans, the council tax rebate is an actual reduction on your bill so doesn't have to be repaid.
You may not feel the difference though.
The government announced last year that local authorities could hike tax rates by up to 3% without a referendum.
Councils can up the rate even further by adding on an extra amount for social care services.
This could offset any savings on your council tax bill.
Can pensioners get the council tax rebate?
Pensioners living in homes within bands A to D should be eligible for the rebate as long as they are paying council tax.
This could, however, exclude low-income older people who get the guarantee element of pension credit as they are sometimes exempt from the charge.
Additionally, a low income pensioner living in a property within band E to H may also miss out.
Will landlords get the council tax rebate?
The payments are only being given once.
The Treasury said the rebate will not be paid for second homes or empty properties so this will exclude landlords.
Will tenants get the council tax rebate?
Tenants are facing an extra cost of living threat as rents continue to rise.
The latest HomeLet Rental Index for January showed rents on newly let properties were up 8.5% annually to to an average of £1,064.
Renters already typically pay 31% of their income on rent compared with the 18% that mortgage holders pay.
They should benefit from energy bill support but whether they get the council tax rebate will depend on their rental agreement.
Some landlords may cover council tax for their tenant.
In this case, no-one would get a rebate.
But if a tenant is named on the council tax bill and responsible for paying it then they could be eligible for the rebate.
If a tenant is exempt from council tax and is on a low income or classed as vulnerable then they may be eligible for the £144m discretionary local authority fund, depending on the criteria.
We explain more about this fund below.
Can you get the rebate if you are on benefits and don't pay council tax?
Speaking to MPs this week, Mr Sunak said the rebates were deliberately not just targeted at those on benefits as the cost of living crisis is also affecting those on middle incomes.
The payments will only be given to households that pay council tax.
However, some councils give benefit claimants are discount or even an exemption on the charge.
This means those paying nothing may miss out on the rebate.
Can you get the council tax rebate if you live alone?
Single people living alone are entitled to 25% off their bill, while an adult living with a student can get 50% off their council tax.
They should still be eligible for the rebates though depending on their council tax band.
Other types of households such as a property where only full-time students live won't get the rebate as they don't pay council tax.
Similarly, someone with a severe mental disability who lives alone or with a carer may not pay council tax so wouldn't be eligible for the refund.
What help is available if you don't live in council tax bands A to D?
Support may still be available if you don't meet the criteria for the rebate
The Treasury has said it will launch a separate £144million discretionary fund to be distributed by local authorities for vulnerable people or those on low incomes who are exempt from the charge or live in higher council tax bands.
Further details on how this will be allocated will be revealed next week.
Separate funding has also been given to Scotland, Wales and Northern Ireland to setup their own support schemes.
What if I can't pay my council tax?
If you're not eligible for the one-off refund, you should check whether you qualify for any other help.
People on a low income or receiving benefits may be eligible for a council tax reduction.
The requirements to get help will vary depending on where you live, so the best first step is to check with your local council.
You can apply for a reduction through the .
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You'll need to have your national insurance number, bank statements, a recent payslip or letter from the Jobcentre, and a passport or driving licence to hand.
If there are other adults in the household, you might need the same information for them too.
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