The aim of the national fuel scheme is to assist householders who are in receipt of long-term social welfare or health service executive payments with the cost of their additional heating needs during the winter season. Fuel allowances are paid for 29 weeks from end-September to mid-April. Some 274,000 customers — 151,000 with basic fuel allowance and 123,000 with smokeless fuel supplement — benefit under the scheme at a cost of €85.4 million in 2005.
Under the scheme a fuel allowance of €9 per week is paid to eligible households during this 29-week winter heating period, with an additional €3.90 per week being paid in the designated urban smokeless fuel zones, bringing the total amount in those areas to €12.90 per week. In the course of a routine review of fuel allowance payments, it came to light that payments had been made in error to certain recipients who were in, or had moved to, local authority accommodation with subsidised or low-cost heating. The allowances in question, which should not have been put in payment in the first place, were withdrawn in these cases with effect from the start of this winter heating season. The allowance was not included in their new pension books or in EFT payments. My Department is not seeking repayment of the overpayment of the allowance which arose as a result of the error.
The main purpose of the review was to ensure that the allowance eligibility rules were being applied correctly and consistently. It is estimated that scheme expenditure savings resulting from this review are of the order of €90,000 in a full year.
As a long-standing policy within the scheme, fuel allowances are not payable in situations where a person has access to their own fuel supply or is benefiting from a subsidised or low-cost heating service, such as those provided by Dublin City Council at a number of its housing complexes.
The basis for this condition of the scheme is that the contribution that local authority tenants in communal heating situations make towards their heating costs is limited to a fixed and relatively small amount, typically around €6 per week, included as part of their overall rent charge. Unlike other tenants and social welfare clients generally, who must buy their own fuel at prevailing retail cost, these tenants are protected from increases in heating costs, the true cost of which is subsidised significantly by Dublin City Council and the other local authorities concerned.
It would be inequitable to retain the allowance in the case of the people concerned in this particular review when neighbouring tenants in very similar circumstances are not eligible and are managing their budgets accordingly. The fact is that these people either were awarded in error initially, or retained a previous legitimate allowance entitlement inadvertently when they moved to accommodation subsequently with subsidised heating.
More generally, I am keeping fuel allowances under review. However, any change to the scheme would have very significant cost implications and would have to be considered in the context of the budget, and in the light of the resources available to me for improvements in social welfare generally.