The national fuel scheme assists householders on long-term social welfare or health service executive (HSE) payments with meeting the cost of their heating needs during the winter season and adjoining months. Fuel allowances are paid for 29 weeks from end-September to mid-April and are included in the recipient's weekly payment during this period. The allowance represents a contribution towards a person's normal heating expenses. It is not intended to meet those costs in full.
The fuel allowance scheme has been improved and expanded over recent years. The range of improvements made to the scheme include an easing of the means test, extending the duration of payment from 26 to 29 weeks and an increase of €5 in the rate of payment in the 2006 budget. In budget 2007, I provided for a number of further improvements in the fuel allowance scheme. These comprise an increase in the weekly rate of fuel allowance of €4 from €14 to €18 (€21.90 in designated smokeless areas) and an increase in the income threshold for eligibility to fuel allowance by €49 from €51 to €100 above the State pension (contributory) rate.
Some 274,000 people benefited from the fuel allowance in 2006 at an estimated annual cost of some €125 million. As a consequence of the increase in rate and the increase in the income threshold for eligibility as announced in the recent Budget, annual expenditure on the scheme in 2007 will increase by an estimated €36.4 million. The total annual cost in 2007 is estimated at over €161 million.
Fuel allowances are incorporated in the recipient's weekly social welfare payment. The Government's objective is to ensure that the recipient's total weekly income, including the fuel allowance, is sufficient to meet all of their income needs, including heating costs. Budget resources are concentrated on providing significant real increases over and above inflation each year in all primary social welfare pension, benefit and assistance rates.
The increases of €16 and €18 per week in the rates of payment for contributory and non-contributory pensions respectively announced in the recent budget are a continuation of this policy. This approach delivers a better outcome for pensioners and others by substantially increasing their income in real terms over the whole year, to better assist them in meeting their normal basic living costs, including heating.
Under the supplementary welfare allowance scheme, which is administered on my behalf by the Community Welfare Service of the Health Service Executive, a special heating supplement may be paid to assist people in certain circumstances who have special heating needs. If a recipient of a social welfare or Health Service Executive payment has exceptional heating costs due to ill health, infirmity or a medical condition which he/she is unable to meet out of household income, it is open to him/her to apply to the local community welfare officer for a special heating supplement under the supplementary welfare allowance scheme.
Any further extensions or improvements to the fuel allowance scheme would have significant cost implications and would have to be considered in a budget context and in the light of the resources available for improvements in social welfare generally.