The aim of the fuel allowance scheme is to assist householders on long term social welfare or health service executive payments with meeting the cost of their heating needs during the winter season. Fuel allowance, which is paid for 29 weeks from end-September to mid-April represents a contribution towards a person's normal heating expenses. Some 274,000 people (151,000 with basic fuel allowance and 123,000 with smokeless fuel supplement) will benefit in 2006 at an estimated annual cost €125.1m.
A number of improvements have been made to the scheme in recent years including the easing of the means test and extending the duration of payment from 26 weeks to 29 weeks. Most recently, Budget 2006 provided for an increase in the rate of fuel allowance of €5.00 from €9.00 to €14.00 (€17.90 in designated smokeless areas).
I have also made provision for increases in the value of the household benefits package. I increased the value of the natural gas allowance to cover increased standing charges and the associated VAT as well as additional kilowatt hour usage in order to cover the 33.8 % increase in the cost of natural gas from October 1st. This means that the value of the natural gas allowance to a household has increased from €313.17 to €516.00 per year.
At present, the electricity allowance covers normal standing charges and up to 1,800 units of electricity. The allowance also covers the VAT applicable to these charges. In the light of the recent increase in electricity charges, the allowance will be increased to cover increased standing charges and the units will also increase from 1,800 to 2,400 with effect from January 2007. I am confident that these increases will be of major benefit to these recipients. Any further changes to the fuel allowance scheme or the household benefits package would have significant cost implications and would have to be considered in the context of the Budget and in the light of the resources available for improvements in social welfare generally.