Dáil Éireann Debate, Tuesday - 10 October 2006
152 Mr. Quinn asked the Minister for Social and Family Affairs the steps he intends to take to ensure that people on low incomes or dependent on social welfare payments will be able to meet fuel costs in winter 2006, in view of the increase in the cost of fuels generally and particularly in the view of increases in electricity and gas prices; and if he will make a statement on the matter. [31744/06]
Amharc ar fhreagra163 Mr. Boyle asked the Minister for Social and Family Affairs if he intends to introduce financial support for those low income earners who are not part of those groups designated and are not benefiting from the increases in winter fuel and domestic gas allowances, in order to alleviate some of the financial strain which they are likely to come under due to increased fuel prices in winter 2006. [31781/06]
Amharc ar fhreagra179 Mr. G. Mitchell asked the Minister for Social and Family Affairs when the income threshold for the fuel allowance was last raised; the plans he has to raise same in the near future; and if he will make a statement on the matter. [31847/06]
Amharc ar fhreagra192 Mr. Ferris asked the Minister for Social and Family Affairs if, in view of the ongoing fuel poverty suffered by older and long-term people receiving disability benefit as outlined in many recent reports, he will examine new ways of addressing this problem including the removal of VAT on fuel for people in this sector, and if he will carry out a cost analysis of such a proposal per sector. [31817/06]
Amharc ar fhreagraI propose to take Questions Nos. 152, 163, 179 and 192 together.
The aim of the national fuel scheme is to assist householders on long-term social welfare or health service executive (HSE) payments with meeting the cost of their heating needs during the winter season. I have no plans to extend the scheme to people who are not in receipt of a weekly social welfare or HSE payments. Issues in relation to VAT on fuel are a matter for my colleague, the Minister for Finance.
Fuel allowances are paid for 29 weeks from end-September to mid-April. The allowance represents a contribution towards a person's normal heating expenses and is not intended to meet those costs in full. 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).
Eligibility to the fuel allowance scheme is subject to means and other conditions. The main conditions that apply to the fuel allowance scheme are that a person must be in receipt of a qualifying payment, must satisfy a means test and must either be living alone or with a qualifying dependant.
People who already qualify for means-tested pensions or allowances such as the State (non-contributory) pension, long-term jobseekers allowance (formally unemployment assistance) or one-parent family payment do not have to undergo a further means test to qualify for fuel allowance. The majority of people who receive fuel allowances qualify because they satisfy the relevant means test for their primary weekly payment. In effect, the means limits for these payments and consequently for fuel allowance, increase each year in line with the increase in payment rates announced in the budget.
In the case of contributory pensions such as state pension (contributory) — formerly old age (contributory) pension — state pension (transition) — formerly retirement pension — and invalidity pensions, which are not means tested, a person may have a combined household income of up to €51 per week, or savings/investments of up to €46,000, over and above the maximum rate of state pension (contributory) and still qualify for fuel allowance. The amount of additional income allowed was increased to €51 per week with effect from 1 June 2005. The overall fuel allowance income limits increase each season in line with the increases in the rate of the state pension (contributory).
In addition to the fuel allowance, some 340,000 pensioner and other households qualify for electricity or gas allowances through the household benefits package, payable towards their heating, light and cooking costs throughout the year, at an overall cost of €119 million in 2006. The annual value of the Natural Gas Allowance per household is currently €313.17. This covers the supply charge and up to 1674 Kilowatt hours per annum. From October 1st the annual value has been increased to €516 per household.
This will cover the recent 33.8% increase in Natural Gas and also increase the kilowatt hours per annum from 1,674 to approx. 3,600 for each household.
The Electricity Allowance covers normal standing charges and up to 1800 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 1800 to 2400 with effect from January 2007.
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 that have special heating needs. An application for a heating supplement may be made by contacting the community welfare officer at the local Health Centre.
The term "fuel poverty" has been described as the inability to afford adequate warmth in a home, or the inability to achieve adequate warmth because of the energy inefficiency of the home. The role of the social welfare system in relation to fuel poverty is primarily to provide income support which the Government does through weekly social welfare payments and specific programmes such as the fuel allowance scheme and the household benefits package. My Department is also cooperating with the Combat Poverty Agency, Sustainable Energy Ireland and other organisations in an action research project to improve energy efficiency in selected older dwellings and to monitor the outcomes in terms of improved cost efficiency and household comfort and health levels. In addition to this, in Budget 2006 I made a grant of €2 million to Sustainable Energy Ireland to enable further research to be undertaken into fuel poverty issues.
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 have been concentrated on providing significant real increases over and above inflation each year in all primary social welfare pension, benefit and assistance rates. This is a more costly approach than increasing fuel allowances because the increase is paid for the full year and not just for the 29 weeks of the winter heating season.
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. It is estimated that 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.
Any changes to the fuel allowance scheme such as rates of payment, income limits and eligibility — and indeed any changes in income support for particular groups through primary welfare payments — would have significant cost implications. Any such changes 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.
