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Low Income Winter Heating Assistance: consultation analysis

Analysis of the responses to our consultation on the proposal to introduce a new Scottish benefit, Low Income Winter Heating Assistance (LIWHA), to replace the current Cold Weather Payment scheme in Scotland from winter 2022.


5. Timing, amount and format of payment

This chapter covers several aspects of the proposals for LIWHA. Firstly, it examines respondents' views on the move from multiple payments under CWP to a one-off payment each winter, and on the timings of that payment. It then outlines key themes in responses to questions around the amount and format of the LIWHA payment.

Payment timing

Q9. Do you agree or disagree with the proposal to have a one-off, annual payment for LIWHA?

Q10. If you disagreed, please could you explain why?

Among all respondents (119)

Agree

Disagree

Unsure

No answer

No. of comments

Number

65

28

23

3

43

%

55%

24%

19%

3%

Q21. Do you agree or disagree with the proposal to pay LIWHA as an annual one-off payment each winter?

Q22. If you disagreed, please could you explain why?

Among all respondents (119)

Agree

Disagree

Unsure

No answer

No. of comments

Number

72

29

15

3

37

%

61%

24%

13%

3%

In contrast to CWP which was triggered by a cold spell, LIWHA has been proposed as a one-off annual payment. Views on whether a one-off payment is appropriate were sought in Q9/Q10 and Q21/Q22. There were 43 open-ended responses to Q10 and 36 to Q22. This section presents an analysis of responses to both questions.

At each question a majority of respondents supported a one-off payment – 55% at Q9 and 61% at Q21. Organisations were more likely to support a one-off payment, though both groups recorded an increase in agreement between the two questions – individuals from 49% to 55% and organisations from 67% to 72%. There was no consistent pattern among respondents who changed their views, and their comments did not address why, but the largest proportion changing was individuals switching from unsure at Q9 to agree at Q21.

Multiple or split payments preferred

The most common theme in responses to Q10 and Q22 was a call for multiple or split payments. Respondents believed multiple payments would help recipients with budgeting. This was mentioned particularly in relation to recipients on prepayment meters who may have high tariffs and variable costs throughout the winter. Energy Action Scotland noted that payments aligned with 'real-time' needs may best assist recipients.

A few respondents suggested two payments – one at the start of the winter and one in the middle – as an alternative. Another recommended four monthly payments over the winter.

"Low income families often have conflicting priorities in winter and budgeting can be an issue when bills suddenly increase. However, a one-off payment may get spent on other priorities and not improve the situation regarding heating over the coldest months. By spreading payment out over the colder months, it is more likely to go where its intended to and make those improvements" – Individual

"Many of the elderly residents in our area live in social housing fitted with prepayment meters etc and do not benefit from standardised monthly bills. Their budgetary needs may be better met by two payments during the short day light period." – Individual

"Disabled people Inclusion Scotland consulted with disagreed about whether there should be a single payment or instead two payments spaced about a month apart. Whilst the majority accepted that a single payment might be administratively easier, and cheaper, to process some continued to believe that two payments might be more helpful in terms of assisting with household budgeting." – Inclusion Scotland

The timing of the one-off payment in February was also a consideration mentioned by some. This is covered in detail in the analysis of responses to Q26.

Agreement with one-off payment

While those who agreed with the proposal were not prompted to explain why, Castle Rock Edinvar, OPFS and the Scottish Women's Convention used the comments box to express their support of the one-off payment for the financial certainty it gives households. They highlighted recipients could plan more easily if they knew the amount and date of payment.

"Following discussions with recipients of Pension Credit and the current Cold Weather Payment ahead of this consultation response, we believe that an annual one-off payment would be most beneficial each winter. Any attempt to split the payment received down into smaller instalments would prove quite unhelpful to many households and detract from the desired impact of the policy." – Age Scotland

"Agree- As previously stated a one-off lump sum payment paid during the winter months will give parents certainty and allow them to budget affectively. This will remove some of the stress that being in fuel arrears causes as people will know when the payment will be made therefore they will know how to forward plan to cover extra winter fuel costs." - OPFS

A few respondents noted that a one-off payment would cost less to administer and would therefore simplify government budgeting.

Amount of one-off payment

While a small number specifically stated that the £50 payment should be split across multiple payments, some respondents proposed multiple payments totalling more than £50. In line with other respondents who advocated for an increase in the amount of the LIWHA payment, they suggested the one-off payment of £50 was insufficient.

"It should either be a higher one-off payment or given more than once." – Individual

A few responses recommended alternate, higher, payment amounts, with some referencing the recent increase in fuel costs associated with the rise in the price cap. Views on the £50 payment rate are described in more detail in this chapter under Q18.

Discussions about payments in other chapters

Across Q10 and Q22, several respondents made comments which aligned with themes under other consultation questions. These included:

  • Some noted their support for a programme that was weather dependent and generated multiple payments. This is detailed in analysis of responses to Q8.
  • As addressed in greater detail under Q20, some respondents advocated for payments to be made directly to energy suppliers and others mentioned concerns regarding the misuse of LIWHA assistance by recipients.
  • A small number mentioned the need to extend the eligibility criteria to include more lower income households, as discussed further in the analysis to Q12.
  • A few respondents reiterated a belief that it was an unnecessary payment, especially during milder winters. Please see Q2 and Q8 for greater detail.

Q26. Do you agree or disagree with the proposal to make LIWHA payments to clients in February of each year?

Q27. If you disagreed, please could you explain why?

Among all respondents (119)

Agree

Disagree

Unsure

No answer

No. of comments

Number

34

62

19

4

69

%

29%

52%

16%

3%

A majority of respondents (52%) disagreed with the proposal to make LIWHA payments to recipients in February each year. Twenty-nine per cent agreed, 16% were not sure and 3% did not answer. A majority of both individuals and organisations disagreed (52% and 53% respectively). There were 69 comments in response to Q27.

February payment is too late

Many respondents observed that a payment date in February is too late. They felt recipients need help earlier in the winter to cover heating costs when cold weather first arrives. This was the most common reason for disagreeing with the proposal. Respondents who expressed this view included individuals and organisations such as Dumfries and Galloway Poverty & Inequalities Partnership, Energy Action Scotland, Citizens Advice Scotland, and Kirkpatrick Juxta Community Council.

"Cold weather does not wait for February and in cases of real need, the challenge of 'feeding the meter' or just being able to afford to put the heating on occurs throughout winter and not merely for one week." – Individual

"This is too late within the Winter period for this payment to be made. Within our local area, cold weather can begin in early November and last until the beginning of April in any given year. If this payment isn't made until February, this is too late for all of the cold weather experienced within November, December and January which are often the months when the coldest weather occurs." – Dumfries and Galloway Poverty & Inequalities Partnership

Concerns were expressed for people using prepayment meters or unregulated fuels (oil or off-grid gas) as they pay for fuel in advance. Respondents who raised this issue included individuals and Energy Action Scotland, Age Scotland, OPFS, Inclusion Scotland, Christians Against Poverty, Caste Rock Edinvar and Child Poverty Action Group in Scotland.

"Those on prepayment meters have no choice in when they pay, but front loading their meter with credit prior to the coldest months would give them the opportunity to have a cushion for when it is worst. Paying the money pre-Christmas or early January would help with this." – Castle Rock Edinvar

"Cold weather spells may be as early as November. For people who have a pay as you go meter - that means they will have to have paid out for their additional energy during the cold spells, at the time it happens. February could be a long time to wait for help with this money already paid out." – Dundee Pensioners' Forum

"Payment in February also fails to recognise the impact that this will have cumulative to other benefits or rebates intended to support households with energy costs. Loading payments to the tail end of the winter… is particularly harmful to low income struggling households. They may look to increase debt levels prior to receipt of payments or rebates which will remain an uncertainty until they are realised. This is particularly difficult for those with prepayment meters who are already paying a premium for energy. These households are budgeting on a daily and weekly at best basis." – Energy Action Scotland

Another theme raised by several respondents was the cost of Christmas. These respondents suggested LIWHA should be paid around Christmas, to help families cover heating costs alongside the other expenses associated with that time of year.

"January might be a better time, as it's just after Christmas expenses and temperatures drop." – Individual

A few respondents noted the danger of people going into debt due to energy costs if they do not receive support earlier in the winter, and the negative impact this has on wellbeing.

"I would rather payment spread out over the colder months to help assist with heating costs etc and reduce numbers of people in arrears during the winter months as accumulating debt is harmful to their financial wellbeing and their mental wellbeing." - Individual

Alternative suggestions for payment timing

Among respondents who called for an alternative payment month, the most common suggestion was January, followed by December. Respondents explained that a payment in these months would help to address the concerns about the cost of Christmas and about a February payment being too late.

November was the third most common suggestion, again because respondents felt the payment was needed earlier in the winter. There was another suggestion made by one respondent; the payment date should be in April to coincide with the end of the supply year as defined by energy companies.

Some, meanwhile, felt the payment should be spread out across the winter rather than having one payment date. The possibility of split or multiple LIWHA payments is covered in detail in response to Q10/22 above.

A few felt payment should be aligned with the payment times for other benefits such as the Winter Fuel Payment and Warm Home Discount.

"We believe that aligning the payment of the LIWHA with other benefits such as the Winter Fuel Payment would offer the most value, as it will allow recipients to begin the winter period with an exact figure of financial assistance that they will have available to them and allow them to budget accordingly. – Age Scotland

Agreement with February date

Some agreed with February as a payment date. These respondents did not always explain this view and where they did, their reasons varied. One argued it would allow time between the qualifying week and payment date for Social Security Scotland to process the benefit. This respondent also felt that the weather is worse after Christmas, while another referred to cold weather in February. One respondent suggested there should be two payment dates: one in November and another in February for recipients who were not eligible at the time of the first qualifying week. Another stated that they agreed with the proposal only if the payment was made early in February, and another felt that the payment should be made in January if it is a single payment, but could alternatively be split between December and January, or January and February.

Amount and format of payment

Whereas CWP currently pays £25 for each cold spell during a winter, LIWHA would comprise a one-off £50 payment annually. It is proposed that the LIWHA payment would take the form of a cash payment directly into a recipient's bank account.

Q17. Do you agree or disagree that the proposed rate of £50 for LIWHA is appropriate?

Q18. If you disagreed, please could you explain why?

Among all respondents (119)

Agree

Disagree

Unsure

No answer

No. of comments

Number

37

62

17

3

79

%

31%

52%

14%

3%

Q17 asked respondents whether they agreed or disagreed with the proposed £50 rate. More than half (52%) disagreed with the proposal, almost a third (31%) agreed, and a sixth (14%) remained unsure. Although a majority of individuals and organisations disagreed with the proposed payment (53% and 50% respectively), organisations were less likely to agree (22% compared to 35% of individuals).

There were 79 open-ended responses to Q18, the highest of all consultation questions, showing many stakeholders felt the payment rate was an important issue.

Insufficient payment amount

Most prevalent among respondents who disagreed was the belief that the proposed rate of £50 is not enough. The main reasons among those explained their view were rising energy costs and the impact of location, which are outlined below. Other issues cited by small numbers included heating costs due to home working and the unpredictable effects of climate change. One respondent felt £50 may not be enough as inclement weather was becoming harder to anticipate.

"That might be enough for a single person living in a well-insulated home, but may not make much of a difference for a large family in a home with bad insulation, so I do think some people would need more than £50 in order for it to be of help." - Individual

Some respondents suggested alternative amounts for an annual payment which they believed to be fairer. Most supported an increase to £100, while other recommendations ranged from £75 to £200 annually. One respondent suggested £50 would be sufficient in the long term if there was targeted help to manage the current rise in energy costs. Christians Against Poverty and Citizens Advice Scotland suggested a regular review of the annual payment amount to account for inflation and changes to heating costs.

Rising energy costs

Many respondents cited the impact of increased energy costs, specifically the energy price cap rise in April 2022. This was also raised at the stakeholder event. Comments included a view that the payment amount should be revised to meet the higher cost of fuel. Other respondents noted the extreme difficulty of those on Universal Credit and pension credits to deal with the fuel increases as low incomes remained stable.

"As the heating bills have increased dramatically, I would say double [£50] may make a slight difference." - Individual

"The amount being considered is not enough to help anyone on low or even middle income to help pay for their heating over the winter months and with the increase in fuel prices in April and then probably again in October, it is a huge concern. People are currently not heating their properties - £50 is a help, but it's a tiny drop in the ocean to what people are needing. £200 would be better." - Individual

"While Energy Saving Trust agrees that this approach is welcome and will help to tackle winter heating costs for people on low incomes, we do not believe that on its own it is sufficient to tackle winter heating costs for people on low incomes. Given the steep increases in fuel bills that people across Scotland are currently facing it is clear that existing steps (which include LIWHA) do not go far enough to mitigate these increased costs." – Energy Saving Trust

Impact of location

The importance of location in determining heating costs was highlighted by several respondents. There was concern for those living in areas regularly affected by colder weather, who could lose support during bad winters. Some respondents expressed concern that the payment would not be enough for those in rural areas who may be off mains gas supply, who rely on oil or electric storage heating, or those living in the Highlands and Islands who pay more for fuel. More detail on this can be found in the analysis of Q8.

Energy efficiency suggestions

Alongside the payment, a few respondents suggested that the government should work toward improving heating costs by incentivising energy efficiency schemes for homes. An example was helping people move away from expensive storage heaters towards more sustainable alternatives.

Unnecessary payments

General disagreement with the payment principle was voiced by a few individuals. A small number thought that £50 was too high, stating that a payment during mild weather was unnecessary. Others questioned how it would be paid for and the impact on public spending.

Agreement with proposed amount

There were a small number of respondents who agreed that £50 would be fair. They suggested it was more than many eligible households might have received previously if they live in areas less likely to experience cold spells. Two respondents noted the benefit of a one-off £50 payment to budgeting, as described in more detail earlier in this chapter.

Q19. Do you agree or disagree with the proposal for LIWHA to be given to clients in the form of a cash payment and not another form?

Q20. If you disagreed, please could you explain why?

Among all respondents (119)

Agree

Disagree

Unsure

No answer

No. of comments

Number

61

32

25

1

52

%

51%

27%

21%

1%

Just over half (51%) of respondents agreed with the proposal for LIWHA to be given as a cash payment. One quarter (27%) disagreed and one fifth (21%) were unsure. Organisations were more likely to agree than individuals (72% compared to 42%). Responses to Q20 were given by 52 respondents.

Concern about how the payment would be spent

The most common reason for disagreement in responses to Q20, particularly from individuals, was a concern that a cash payment could be misused. In this discussion, some expressed an understanding that low income households may need to use the money for food or clothing rather than heating. Others were concerned it could be used for mobile phone bills, alcohol, cigarettes and gambling. They viewed this as a waste of public money.

A small number felt that timing the payment at an appropriate point could encourage recipients to use LIWHA for heating costs. As an alternative to cash payments, one respondent suggested a reduction in council tax payments.

Direct-to-supplier payments

Many respondents believed that payment should be made directly to energy suppliers. Some suggested payment could be transferred into the recipient's energy accounts or through varied options such as voucher systems, coded accounts or a reduction in fuel bills. A few respondents highlighted examples of other government programmes, such as Fuel Direct and Warm Home Discount, that pay in this way. Some of those who were concerned that cash payments would be misused suggested that direct payments to energy suppliers would mitigate their concern.

"I think the payment should be paid directly to your energy supplier so that they deduct it from your bill or credit your prepayment meter. That way the money is being used what it's supposed to be used for and not squandered on other things." - Individual

Organisations like Energy Action Scotland and Citizens Advice Scotland expressed some reservations about the cash payment model. While they supported financial assistance to qualifying households, they questioned the impact of a £50 cash payment. Citizens Advice Scotland stated that while an increase in net adjusted income has the potential to improve fuel poverty rates, a decrease in fuel bills would have a greater effect on the rate overall. At the stakeholder event, Citizens Advice Scotland cited research which shows that payments to suppliers have a more direct impact on reducing fuel poverty than cash payments.

A few felt direct-to-supplier payments would mean people were only paying off existing debt, either in the form of bank overdrafts or arrears to energy companies. Citizens Advice Scotland suggested this may only be true of people on prepayment meters and advocated for identifying such households and using workarounds such as fuel vouchers.

"They may be in overdrafts and if this money was paid into a bank, it may be taken off and have no real benefit so another system such as vouchers was suggested." – Scottish Women's Convention

The potential cost and administrative burden to the government of paying energy suppliers directly was noted by a few respondents. By increasing the cost to administer the programme, respondents thought less money would be available to the recipients. While acknowledging these hurdles, Citizens Advice Scotland suggested LIWHA could be administered in a similar way to the Scottish Government's Home Heating Support Fund.

Choice of payment option

Some respondents argued that recipients should decide on the best method of payment for them. Organisations and individuals both agreed cash may be preferred in some instances or a payment to a supplier in others. Energy Action Scotland called for more research into which payment method best guarantees recipients have access to heat and power during the winter.

"They should be given it in the form they desire e.g. direct payment to energy company, voucher for the coalman or cash." - Individual

Confusion about cash

Some individuals believed a recipient would receive a payment in the form of coins or notes. They suggested the payments be made directly to the client's accounts, as proposed, or paid by cheque.

Agreement with cash payment

Several respondents replied to Q20 and expressed various reasons of their support for a cash payment. A few organisations noted that a cash payment is destigmatising, treats the recipient with dignity, empowers them to make their own decisions and provides some certainty for budgeting. While Christians Against Poverty supported cash payments, they also stated that their clients are often open to multiple types of payment. The Scottish Women's Convention noted that women could use the money to buy warmer clothes, thereby reducing the cost of heating in other ways.

"We strongly welcome the approach to continue to make these cash payments. To reduce poverty, it is important that the Scottish Government continue to focus on a cash first approach. This gives households the freedom to use the payments is the way that is best for their families, and ensure payments are in line with the principle in the Social Security Scotland Act – in particular the principle of treating claimants with dignity." - Child Poverty Action Group in Scotland

Though they welcomed the budget being allocated to LIWHA and supported a cash-based payment, Save the Children questioned whether it may be preferable to add the LIWHA payment to existing payments to low income families.

"We are concerned that a separate payment to cover specific types of costs is compartmentalising poverty and there could be more effective and efficient ways of helping families living on low incomes. For example, could the contribution to eligible families be made through existing mechanisms such as the Scottish Child Payment or the scope of the Child Winter Heating Assistance scheme be extended to include more households with children living on low incomes." – Save the Children

Contact

Email: WinterBenefitsPolicy@gov.scot

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