Dáil Éireann Debate, Tuesday - 18 February 2014
408. Deputy Mattie McGrath asked the Minister for Social Protection if she will carry out an immediate poverty impact assessment with respect to the changes from a unit based approach to a monetary value based approach in the home benefit package's support for recipients of ESB heating; and if she will make a statement on the matter. [8205/14]
View answerMy Department will spend over €380 million in 2014 on the electricity and gas elements of the household benefits package and the fuel allowance scheme to assist customers with their energy costs. Help will also continue to be available for people with special or additional heating needs through the heating supplement and exceptional needs payment scheme under the supplementary welfare allowance scheme.
The electricity allowance has a monthly value of €35 for both electricity and gas customers. The value of the allowance was protected in Budget 2014. Electric Ireland and Bord Gáis gas customers receive this amount as a credit on their bills. Customers who have switched to other companies receive a direct monthly cash payment.
A poverty impact assessment was carried out in late 2011 in the context of developing a range of options for the administration of the household benefits package in a de-regulated domestic energy market. The assessment focused on the potential impact of changing the electricity allowance from a unit base to a cash base to avail of cheaper rates available. It also examined the issue of the vulnerability of older people who are the main recipients of the household benefits package.
Before January 2013, the free electricity allowance was based on Electric Ireland standard units even though it was possible to avail of cheaper rates from other companies. The poverty impact assessment noted that there was little incentive for customers to switch to other cheaper companies. Only 16% of social welfare customers had switched companies to avail of cheaper rates, compared to 42% nationally. With the units based approach it was not possible for customers to carry over any saved units from Electric Ireland to other companies; this acted as a disincentive for customers wishing to obtain better value. Under the new cash credit system, it is now possible for a customer with Electric Ireland to transfer to other companies while maintaining their cash credit.
Current data shows that Ireland’s pensioners have the lowest consistent poverty rate and as a group compared to the rest of the population are least likely to be at risk of poverty - pointing to the adequacy and importance of the State pension and other benefits. Between 2004 and 2011, consistent poverty for older people (those over 65) fell from 3.9% to 1.9%. The ‘at risk of poverty’ rate for people in that age group also fell, from 27.1% to 16% over the same period.
