Bishop of St Albans asks Government about fuel bill home budgeting

On Thursday 18th June the Bishop of St Albans, Rt Revd Alan Smith, received a written answer to a question to Government on fuel bills and Fuel Direct.

 Bishop St Albans June 2015The Lord Bishop of St Albans To ask Her Majesty’s Government what assessment they have made of the affordability of a standard Fuel Direct rate of £3.70 for direct payments for arrears on fuel bills; and whether in setting that rate they considered (1) allowing some customers to pay a lower rate of direct deduction, and (2) allowing customers to pay by Fuel Direct for ongoing bills when they are not in arrears.

Baroness Altmann: Third Party Deduction is a long standing scheme of last resort where all other means of budgeting have been exhausted. Where the Secretary of State decides that it is in the claimant’s best interests to order repayment of the arrears he can do so. The scheme was introduced in the 1970’s to protect the vulnerable and their family, whilst not adding to their financial burden. Fuel Direct is set in legislation at 5% of their Personal Allowance, which is a fixed deduction of £3.70 for each element of fuel debt. This is considered to be the most appropriate level of repayment in order to clear the fuel debt arrears and to prevent enforcement action. Each year the amount of Third Party Deduction is reassessed as part of The Social Security Up-rating Order. Once the arrears have been paid a person will usually be taken off the Fuel Direct scheme. In exceptional circumstances a person may be allowed to remain on the Fuel Direct scheme to help ensure that they don’t get into debt again. However Fuel Direct is not intended as a budgeting aid and the Governments main objective is to help people into employment, whilst encouraging them to be responsible for their own financial affairs, whether they are on benefit or not.