The Fuel Direct scheme is a UK government initiative designed to help people on low incomes manage their energy bills. It allows claimants to have their energy bills paid directly out of their benefits, which can help to avoid arrears and reduce the risk of disconnection. In this article, we’ll take a closer look at the Fuel Direct scheme, who’s eligible, and how it works.
What is the Fuel Direct scheme?
The Fuel Direct scheme is a way for people who receive certain benefits to pay their energy bills directly out of their benefits. This means that the money for their energy bills is taken out of their benefits automatically, rather than having to be paid separately. It’s designed to help people who struggle to manage their energy bills, particularly those who are in arrears or at risk of disconnection.
The Fuel Direct scheme is managed by the Department for Work and Pensions (DWP), and is available to people who receive certain benefits, including Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Universal Credit, and Pension Credit. To be eligible, claimants must be in receipt of one of these benefits and have at least one fuel bill in their name.
How does the Fuel Direct scheme work?
To use the Fuel Direct scheme, claimants must first contact their energy supplier and inform them that they wish to use the scheme to pay their bills. The energy supplier will then send them a form to complete, which will authorise the DWP to make deductions from their benefits to pay their energy bills.
Once the form has been completed and returned to the energy supplier, the DWP will start making deductions from the claimant’s benefits to pay their energy bills. These deductions will be made on a regular basis, usually monthly, and will cover the amount owed on the claimant’s energy bills.
The Fuel Direct scheme is designed to help claimants who are struggling to manage their energy bills, particularly those who are in arrears or at risk of disconnection. By paying their energy bills directly out of their benefits, claimants can avoid falling further into arrears and reduce the risk of disconnection. The scheme can also help to budget for energy bills, as the payments are made automatically and on a regular basis.
Who’s eligible for the Fuel Direct scheme?
To be eligible for the Fuel Direct scheme, claimants must be in receipt of one of the following benefits:
- Jobseeker’s Allowance
- Employment and Support Allowance
- Income Support
- Universal Credit
- Pension Credit
Claimants must also have at least one fuel bill in their name, and be struggling to manage their energy bills, particularly if they are in arrears or at risk of disconnection.
It’s worth noting that not all energy suppliers are part of the Fuel Direct scheme, so claimants should check with their supplier before applying. Some suppliers may also require claimants to be in arrears before they can use the scheme, while others may require a payment plan to be set up before authorising the scheme.
Benefits of the Fuel Direct scheme
The Fuel Direct scheme can offer a range of benefits to claimants who are struggling to manage their energy bills. These include:
- Reduced risk of disconnection: By paying energy bills directly out of benefits, claimants can reduce the risk of disconnection and avoid falling further into arrears.
- Improved budgeting: The Fuel Direct scheme can help claimants to budget for their energy bills, as payments are made automatically and on a regular basis.
- Less stress: For people who are struggling to manage their energy bills, the Fuel Direct scheme can provide peace of mind and reduce stress.
- Improved credit rating: By avoiding arrears and disconnection, claimants can improve their credit rating and avoid future financial difficulties
Does the scheme eliminate debt?
The Fuel Direct Scheme doesn’t eliminate debt. Rather, it provides a way to pay off energy debts over time by making regular payments directly from a claimant’s benefit payments. These payments are fixed and set by the Department for Work and Pensions based on the level of debt owed. While the scheme can be a helpful tool in managing and paying off energy debts, it doesn’t cancel or erase them altogether.
It’s important to note that the Fuel Direct Scheme only applies to energy debts and not other types of debts, such as credit card debt, loans, or council tax arrears. For these types of debts, individuals should contact the relevant organisations to discuss payment plans or other arrangements.
Additionally, while the scheme can be a helpful tool, it’s not a long-term solution to ongoing energy debt. Individuals should also consider ways to reduce their energy usage and costs, such as by making their homes more energy-efficient or switching to a cheaper energy supplier. Seeking advice and support from organisations like Citizens Advice can also be helpful in managing energy debts and reducing energy costs.