Cost of living crisis: How £400 energy rebate works, when it's paid and do I have to pay it back?

People will be receiving this payment soon ahead of the winter months. Announced on July 29 as part of the government’s Energy Bills Support Scheme (EBSS), a £400 rebate will be handed out in a bid to offset rising energy bills.

The payment is due to be given this month, but how does it work? Here is all you need to know:

How does the £400 energy rebate work?

All domestic electricity customers will receive the automatic benefit – only one per cent of households are ineligible. The £400 will be paid out over six months from October. It is applied to your monthly household energy bill. You do not need to contact your energy supplier, or apply to receive the money.

When is it paid?

The discount will be given monthly, even if you use a payment card or buy your energy quarterly. You will receive a £66 benefit in October and November, and a £67 payment in December, January, February and March.

If the discount is not handed out by the end of October, you need to contact your supplier. It will be given to you as either a direct reduction to your monthly direct debit, or as a refund to your bank account after your direct debit is paid.

People who use traditional prepayment meters will be given redeemable vouchers from the first week of each month. These will be handed out as either SMS texts, emails, or through the post.

They can be redeemed at the nearest top up point, such as a local PayPoint or Post Office. If you pay for electricity as part of your rent, your landlord may pass that discount on to you. Landlords who charge an ‘all inclusive’ rent – where a fixed cost for usage is part of the rental charges – they are advised to come to an agreement with you as part of the tenancy agreement.

If you move house while the payments are given, you will still benefit from the relevant portion of the £400.

This also applies to students.

Do I have to pay this back?

The rebate is described non-repayable, so you do not have to repay anything. The EBSS is part of the government’s £37 million Cost of Living Support package. Greg Hands, energy minister at the time of the announcement, said the scheme will support 29 million households with their energy bills this winter.

He added: “I encourage families across the country to engage with these plans and particularly those customers on traditional prepayment meters who need to take action. Coupled with world-leading action to radically enhance our home-grown energy security, we will continue to be on the side of British consumers now and into the future.”

No one will be asked for their bank details at any point. The government are taking steps to protect customers from fraud. Energy companies are expected to report to government the action they are taking to ensure this support is being passed onto customers. This includes notifying customer in writing that they have received the benefit, and to ensure it is clearly shown on all bills.