The free schemes, including the free electricity allowance scheme, are generally available to people aged 66 years or over, who are living alone and are in receipt of a social welfare type payment or who pass a means test. They are also available to carers and people with disabilities under the age of 66 who are in receipt of certain welfare type payments. Widows and widowers aged from 60 to 65 whose late spouses had been in receipt of the free electricity allowance retain that entitlement in order to ensure that households do not suffer a loss of entitlement following the death of a spouse.
From October 2000, the free schemes, including the free electricity allowance scheme, were extended to all persons aged 75 and over, regardless of their income and household composition. In addition, provision was made in Budget 2001 to further extend the free schemes to all persons aged 70 years and over from this month.
The free electricity allowance was introduced in October 1967 and it covered 600 units per annum. In 1972 it was increased to the current 1,500 units each year, 200 units per billing period in the summer and 300 units per billing period in the winter, in addition to the normal standing charges. VAT due on this standard allowance is also covered. The value of the allowance, if fully taken up, is £154.09 per annum.