With energy bills predicted to soar this winter, the payments will provide some relief to millions struggling to keep the heating and lights on.
According to the gov.uk website, the £400 discount, administered by energy suppliers, will be paid to consumers over six months with payments starting from October 2022.
How will it be paid?
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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 six month period – totalling £400.
Traditional prepayment meter customers will be provided with Energy Bill discount vouchers in the first week of each month, issued via SMS text, email or post, using the customer’s registered contact details. These customers will need to take action to redeem these at their usual top-up point, such as their nearest local PayPoint or Post Office branch.
Households will see a discount of £66 applied to their energy bills in October and November, rising to £67 each month from December through to March 2023. The non-repayable discount will be provided on a monthly basis regardless of whether consumers pay monthly, quarterly or have an associated payment card.
This also applies to students and other tenants renting properties with domestic electricity contracts from landlords where fixed energy costs are included in their rental charges. In these circumstances, landlords who resell energy to their tenants should pass the discounted payments on appropriately, in line with Ofgem rules to protect tenants.
Other cost of living help
Households most in need will be eligible for further support in addition to the Energy Bill discount. This includes:
A £650 one-off Cost of Living Payment (in two instalments) for around 8 million households on means tested benefits.
A £300 one-off Pensioner Cost of Living Payment for over 8 million pensioner households to be paid alongside the Winter Fuel Payment.
A £150 one-off Disability Cost of Living Payment for around six million people across the UK who receive certain disability benefits.
A £500 million increase and extension of the Household Support Fund available to councils to support vulnerable households with the cost of essentials such as food, utilities and clothing.
Lord Callanan, Energy and Business Minister, said: "This is a challenging time for many amidst the rising cost of living, which is why the government is stepping in with direct support.
“From delivering discounted energy bills throughout the winter months to launching a new website providing homeowners with help to make homes cheaper and warmer, we want to make sure UK residents have the information they need to access all the support that is on offer.”