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Notes for Guidance - Common Financial Tool

Notes for Guidance explaining the information and evidence requirements to support debt solution applications.


14. UK Government cost of living support – help with energy bills

CFT Guidance - Help with energy bills

All domestic energy customers in Great Britain will receive a grant of £400 to help with the costs of energy bills through the Energy Bills Support Scheme. This money will not require to be paid back.

Energy suppliers will deliver this support to households with a domestic electricity meter over six months from October. Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher.

These payments will be paid as bill/meter credits, no funds will pass through clients’ bank accounts. These bill credits will not be treated as income. In effect, this measure will result in bills reducing – so less expenditure, rather than more income. So, we would expect to see this reflected as a lower increase in energy bill expenditure.

£650 one-off Cost of Living Payment for those on means tested benefits

More than 8 million households on means tested benefits will receive a payment of £650 this year, made in two instalments. This includes all households receiving the following benefits:

  • Universal Credit
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Working Tax Credit
  • Child Tax Credit
  • Pension Credit

DWP (Department for Work and Pensions) will make the payment in two lump sums – the first from July, the second in the autumn.

The £650 payments are to be paid through means-tested benefits, which are inalienable (not transferable and can’t pass to a trustee). These payments are intended specifically to go toward payment of utility bills. The general rule relating to money held in bank accounts for Minimal Asset Process (MAP) bankruptcy application, will still apply, so balances over £1000 will disqualify a MAP application.

MAP applications should not be submitted when bank balances exceed £1000, though all the clients in the list above (with the exception of WTC recipients who require additional qualification criteria) will be eligible for a fee waiver in the event of having to make a repeat application).

In terms of the CFT, the increase in spending will almost certainly more than offset these payments and money advisers / insolvency practitioners should average these payments annually, given they are intended to offset spending across the year. Contributions cannot be sought in bankruptcies and Protected Trust Deeds where the applicant’s sole income is derived from benefits.

One-off £300 Pensioner Cost of Living Payment

Pensioners are disproportionately impacted by higher energy costs, and many low-income pensioner households do not claim the means tested benefits they are entitled to. So, pensioner households will receive an extra £300 this year to help them cover the rising cost of energy this winter.

This additional one-off payment will go to the over eight million pensioner households across the UK who receive the Winter Fuel Payment and will be paid on top of any other one-off support a pensioner household is entitled to, for example where they are on pension credit or receive disability benefits. Eligible households currently receive between £200-£300, so the payment will represent at least double the support for this winter.

The £300 pensioner cost of living payment will be payable to all pensioners. In common with the existing Winter Fuel Payment (WFP) this will not be means tested. The uplift will amount to under £6 per week and should be reflected in the applicant’s income. It is unlikely to make a substantive impact on the surplus income of recipients, especially as pensioners will face a greater increase in energy spending. For CFT purposes, again, this should be averaged across the year). In those bankruptcy cases where AiB is trustee, we have no intention of treating these payments as windfalls to seek Debtor Contribution Order (DCO) payments from them as the effort in doing so would outweigh any potential benefit to the sequestrated estate.

£150 Disability Cost of Living Payment

Around six million people across the UK who receive the following disability benefits will receive a one-off payment of £150 in September:

  • Disability Living Allowance
  • Personal Independence Payment
  • Attendance Allowance
  • Scottish Disability Benefits
  • Armed Forces Independence Payment
  • Constant Attendance Allowance
  • War Pension Mobility Supplement

People with disabilities may face a wide range of additional costs, such as specialist equipment, specialist food, and increased transport costs, and this payment will help with these costs as they are likely to have increased. Claimants must be in receipt of, or have begun an eventually successful claim for, one of these benefits as of 25th May 2022 to be eligible for this additional payment.

For the many disability benefit recipients who receive means tested benefits, this £150 will come on top of the £650 they will receive separately.

The £150 Disability Cost of Living Payment is not means-tested. The level of support is equal to under £3 per week. Once more, AiB has no intention of treating these payments as windfalls from which to seek DCO payments as the effort in doing so would outweigh any potential benefit to the sequestrated estate, and will more likely be surpassed by the increase in energy spending this is intended to only partially cover.

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