Every household in the country will receive €113.50 credit to help reduce the financial impact of the ongoing energy crisis.
We’ve been hearing about the seemingly never-ending energy crisis for months now. However, the impact of increasing gas and electricity costs probably hasn’t been seen until recently, when households started receiving their winter energy bills.
However at last there is some much-needed good news! There are now plans by the Government to introduce a one-off electricity credit of €113.50 for every household nationwide.
Here’s all you need to know about the planned electricity credit.
Proposals for the new scheme, known as the Electricity Costs Emergency Benefit Scheme, aimed at addressing the energy crisis were approved by Cabinet on Tuesday 14th December.
The plans will see two million homes nationwide receive a one-off credit to help reduce the impact of electricity bills, regardless of income. Initially, it was announced that the credit would amount to €100, but this did not include VAT. However, it has since been announced that VAT will also be included, meaning that bill payers will now save €113.50 once the scheme is introduced.
The scheme is expected to cost around €210 million and will be funded through the existing budget of the Department of Environment, Climate Action and Communications.
The credit will apply only to domestic bills, including pay-as-you-go electricity, and commercial premises will not be able to avail of the discount.
When will households receive the credit?
New legislation will be required to underpin the scheme and the new bill is expected to go before the Dáil and Seanad in early February. It will likely be passed within a week.
It’s hoped that once the legislation is passed, the credit will be deducted from household electricity bills by the middle of March.
Under the plans, the electricity credit will be operated by ESB Networks, who will make payments to individual energy suppliers. The reduction in bills will be automatic, so households don't need to apply for it.
The Department of Environment, Climate Action and Communications is currently working on a mechanism to give the tax credit to those who use pre-paid electricity meters and an announcement is expected on this shortly.
Addressing the energy crisis
Speaking about the proposed plans, Minister for Finance Paschal Donohoe said:
“We are working on a number of options to see if we can be of help to homes and families as we see energy prices continue to rise."
While social welfare and tax changes were introduced in Budget 2022, Mr Donohoe emphasised that not all households would benefit from the measures implemented.
“That is why we need to look at whether other measures are possible and that will be done quickly."
Tánaiste Leo Varadkar also said that households can expect their energy bills to decrease in 2022, and hinted at the possibility of introducing additional measurements to reduce gas bills.
According to Varadkar, the Government is reviewing a range of options put forward by the European Union, which aim to assist families with the high cost of energy.
Inflation on the rise
Recent data from the Central Statistics Office (CSO) showed that the annual rate of inflation rose to 5.5% in December, marking a new 20-year high.
It seems as though inflation is set to keep rising over the next few months and it should come as no surprise that the soaring costs of energy have contributed hugely.
Since the start of the year, there have been over 35 energy price hike announcements combined from all suppliers in the Irish market. And according to recent research from Cable.co.uk, consumers in Ireland are paying more for their electricity than most countries globally.
To find out how you can lower your living expenses this winter, take a look at our blog on how to beat rising inflation and consider switching energy supplier.
Save on your energy bills this winter
One of the easiest and quickest ways to mitigate the spate of recent energy price increases we’ve experienced is by switching to a cheaper supplier.
Despite rising energy costs, switching to a cheaper supplier is worthwhile. The average household will likely end up paying around €700-800 more for their annual energy bills next year, with some paying even more. However if you switch, you could save up to €600 on your annual energy bills.
Switching supplier is quick and easy and can all be done on bonkers.ie in the space of a few minutes. Use our energy comparison tool to compare the best deals today across the main energy suppliers nationwide.
Get in touch
Are you happy to hear the news about the one-off electricity credit? Do you think it's enough? And do you think there’s anything else that the Government should be doing to combat rising energy prices? We’d love to hear from you in the comments below!