Main £150 cost-of-living payment scheme closes

The main cost-of-living payment scheme run by the Welsh Government closed on 30 October 2022, after paying out £146.6m to 977,483 eligible households¹. The scheme had launched on 26 September, and the Welsh Government said it extended eligibility to support more households¹.

The paper sets out wider Welsh Government support worth £1.6 billion this year, including help with energy costs¹. It says local authorities have until the end of March 2023 to deliver additional funding, which they are targeting at households that are struggling, and that support for off-grid households unable to afford their next delivery of oil or LPG because of extreme financial hardship runs until the end of March 2023¹. Free school meals are being extended to primary schools from September 2022, and £11m in grant funding will be made available to Single Advice Fund services in 2023-24¹.

On fuel poverty, the paper cites figures published on 13 April 2022 showing that in October 2021, 196,000 households in Wales, or 14%, were estimated to be living in fuel poverty¹. Modelling the April 2022 price cap against those figures, it estimates up to 45% (614,000) of all households could be in fuel poverty and 8% (115,000) in severe fuel poverty¹.

The paper also sets out pressures on household incomes. It cites ONS data showing median disposable income for the poorest fifth of the population fell by 3.8% to £14,500 in the financial year ending 2022, while the richest fifth saw an increase of 1.6% to £66,000; median household disposable income in the UK was £32,300, a decrease of 0.6%¹. On Universal Credit, it says payments can be cut by up to 25% under deduction policy, with the most frequent deduction being recovery of advances given to cover the five weeks claimants wait before the first payment, and that 44% of those receiving Universal Credit have money automatically deducted¹.

The paper reports findings from the ONS Opinions and Lifestyle Survey for 22 June to 11 September 2022 on difficulty affording bills:

Source:¹

It adds that around half of those with a personal income below £20,000 a year said they found it difficult to afford their energy bills, compared with around a quarter (23%) of those earning £50,000 or more¹. Citizens Advice reported that the number of people it has helped with debt issues increased in every month for the last five months, and that the average energy debt of disabled people or people with a long-term health condition rose by over 25% between 2019 and 2022, against just under 10% for people without a disability or long-term health condition¹. The paper says 83% of people accessing Single Advice Fund services identified themselves as coming from a population group being hardest hit by the cost-of-living crisis¹.

Why it matters for households

The closure of the main scheme on 30 October 2022 means the £150 payments it delivered are no longer being made under that scheme, though the paper says local authorities have until the end of March 2023 to deliver additional funding targeted at struggling households, and off-grid support runs to the same date¹. Households in Wales estimated to be in fuel poverty numbered 196,000 in October 2021, and the paper's modelling suggests the April 2022 price cap could push that as high as 614,000¹. For Universal Credit claimants, deductions can reduce payments by up to 25%, and 44% of recipients have money automatically deducted, most often to recover advances covering the five-week wait for a first payment¹. The income figures cover the financial year ending 2022, so they describe the position before the October 2022 scheme closed¹.

What happens next

Local authority delivery of additional funding, and support for off-grid households unable to afford their next delivery of oil or LPG, both run until the end of March 2023¹. In 2023-24, £11m in grant funding will be made available to Single Advice Fund services¹. The paper says the Welsh Government continues to call on the UK Government to end the five-week wait for Universal Credit payments¹.