Welsh Government announces £150 Winter Fuel Payment and £25m Discretionary Fund

The Welsh Government has announced a £150 payment for households in council tax bands A to D and for households receiving support from the Council Tax Reduction Scheme in all council tax bands, together with a £25m Discretionary Fund available to local authorities "to help households which may be struggling"¹. The announcements follow the doubling of the Winter Fuel Support Scheme Payment to £200 earlier in February 2022¹.

The £150 payment extends to households in receipt of Council Tax Reduction in every band, not only bands A to D¹. The Discretionary Fund is held by local authorities, which decide how it is used¹. The Welsh Government receives £180 million of Barnett Funding from the UK Treasury as a consequence of the Energy Bills Rebate announced by the UK Government, which provides around 28 million households with a £200 energy bill credit¹. Energy suppliers will apply that credit from October, and it will then be recovered from people's bills in equal £40 instalments over five years from 2023¹. Households in England in council tax bands A to D will also receive a £150 rebate, and local authorities in England have been given £144 million in discretionary funding¹.

The context is a sharp rise in energy costs. The Energy Price Cap, set by OFGEM, will rise a further 54% on 1 April, and those on default tariffs paying by direct debit will see an average increase of £693 to £1,971 per year¹. National Energy Action Cymru estimates that over 280,000 households in Wales could be in fuel poverty from April, a further 100,000 households since October 2021¹. The Welsh Government is consulting on the future of its Warm Homes Programme, its key delivery mechanism to tackle fuel poverty and improve home energy efficiency for those most in need¹.

Mark Isherwood MS, chair of the Cross Party Group on Fuel Poverty and Energy Efficiency, wrote that the announcements had been welcomed but that the Winter Fuel Payment would not reach everyone in need, including those in fuel poverty not in receipt of means-tested benefits¹. The group's stated purpose is:

National Energy Action is calling on the Welsh Government to make the next payment ahead of October, before the coldest months; to expand support to those who have missed out; and to use the intervening time to ensure payments reach as many eligible households as possible¹. The Cross Party Group's second meeting this Senedd term is scheduled for 14 March¹.

Why it matters for households

Households in Wales in council tax bands A to D, and those receiving Council Tax Reduction in any band, are covered by the £150 payment¹. The separate £200 Winter Fuel Support Scheme Payment is a doubled figure, following the earlier announcement in February 2022¹. The £25m Discretionary Fund sits with local authorities, so eligibility and how it is claimed depend on the council rather than a single national rule¹. The UK-wide £200 energy bill credit is not a grant: it is applied by suppliers from October and recovered in £40 instalments over five years from 2023, so bills fall in the short term and rise later¹. From 1 April, the price cap rise of 54% means an average increase of £693 to £1,971 per year for those on default tariffs paying by direct debit¹. National Energy Action Cymru's estimate of over 280,000 Welsh households in fuel poverty from April is 100,000 more than in October 2021¹. The Welsh Government has not said when the £150 payment will be made; the Bevan Foundation piece does not give a payment date¹.

What happens next

The Energy Price Cap rise takes effect on 1 April¹. The UK Government's £200 energy bill credit is applied by suppliers from October, with recovery in £40 instalments over five years from 2023¹. The Cross Party Group on Fuel Poverty and Energy Efficiency meets on 14 March¹. The Welsh Government's consultation on the future of the Warm Homes Programme is open¹. No date has been reported for payment of the £150 or for allocation of the £25m Discretionary Fund¹.

For help with costs in Wales, see Money help in Wales: free guidance and Welsh support, the benefits hub, Winter Fuel Payment: who gets it and the income threshold, Warm Home Discount and other help with energy bills and Discretionary Housing Payments from Your Council.