The Government today approved changes to the Fuel Allowance and Household Benefits schemes that will bring annual savings of €65 million. Minister for Social Protection, Joan Burton TD, said: “While we want to protect the basic social welfare payments which have very positive economic and social effects, regrettably there is an ongoing necessity to achieve savings due to our commitments with the IMF/EU/ECB Troika. The savings arising from this measure were provided for last December in Budget 2011 but were not specified or announced by the Government at that time.”
From September 2011 the Fuel Allowance is to be standardised at €20 per week, the rate currently received by the majority of customers, with no additional allowance for living in a smokeless area. The cost of the Telephone Allowance will be reduced following negotiations with Eircom which will ensure that customers receive €26.86 of value on their bills, at a cost to the State of €22.22 per month. The number of free units provided under the Electricity and Gas Allowance will be reduced to the 2007 level: this reduction may be offset to some extent if customers switch to other companies in search of better deals. These three measures will generate savings of €17 million in 2011 and €65 million annually.
Minister for Social Protection, Joan Burton TD, said: “Assistance with the cost of fuel, electricity, gas and telephone bills has always been an important element of social welfare provision and will continue. My Department will spend over €530 million, over half a billion euros, in 2011 on these schemes which benefit over 630,000 people. Help will also continue to be available for vulnerable people with special or additional heating needs through the Heating Supplement and Exceptional Needs Payment Scheme under the Supplementary Welfare Allowance scheme.”
The Fuel Allowance is a means-tested weekly payment of €20 available for people on long term welfare schemes; it is paid for 32 weeks from September to April each year and this element of the scheme remains unchanged. The additional Smokeless Allowance, which is being removed from September 2011, is a top-up of €3.90 a week payable only to Fuel Allowance customers in the towns where the sale of bituminous fuel is banned.
Minister Burton noted: “The Smokeless Fuel Allowance was introduced at a time when many more people used coal and there was a big price difference between the types of coal. This situation has changed radically, with far fewer people using coal. Also, smokeless fuel is estimated to be more than 50% more energy efficient than conventional coal which more than offsets any increase in cost.”
The Telephone Allowance will be set at €22.22 per month (from €25.91 per month) from September 2011. However, the Department of Social Protection has negotiated with Eircom, the main supplier, to ensure that all Eircom customers will get a value of €26.86 towards their telephone bill.
Commenting on this change Minister Burton said: “I welcome this new ‘social benefits’ deal with Eircom to obtain maximum value for the State and for our customers. We’ll no longer pay a monthly rental for handsets, but customers will be able to keep their set at no charge. It just makes more sense.” The amounts paid in respect of customers of other companies or to customers who receive the allowance on a cash basis will also be reduced to €22.22 per month.
The contribution provided annually under the Electricity and Gas Allowances is to be reduced from 2,400 to 1,800 units with effect from 1 September 2011 in the case of the Electricity Allowance. The equivalent rate of the electricity cash payment will be adjusted from €43.80 a month to €35.80 a month from Tuesday 6th September 2011 and the equivalent annual value of the Gas Allowance will also be adjusted from €489 to €393 from the same date. This will restore the allowances to the levels paid in 2007. The annual savings will be €29.8 million with a saving in 2011 of €5 million.
“We are looking carefully at all our schemes and I will continue to negotiate with suppliers to ensure we get the best value for money with the least impact on our customers”, concluded the Minister.