There's £200 coming off your energy bill in October - and you'll get it whether you want it or not.
Chancellor Rishi Sunak announced the discount last week in answer to the news that Ofgem had raised the energy price cap by 54% or almost £700 per household.
The new cap will see the 22million customers who are currently on default tariffs pay a maximum average of £1,971 per year for their fuel from April. If you're a high user, you'll pay even more.
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The rebate - or loan, depending on which way you look at it - has sparked a lot of debate and confusion.
Households will have to wait for the government consultation on the rebate this spring to see if their concerns are addressed, but in the meantime, here we explain how it looks like it's all going to work.
Why am I getting £200?
To soften the blow of having to find an average of nearly £2000 per year to pay your fuel bills.
It was announced straight after the energy price cap increase, to help families cope with rising energy bills.
Sunak said the previous price cap had been keeping bills 'artificially low' and that this had led suppliers who couldn't afford to meet the rising wholesale costs to collapse.
'Without government intervention the increase in the price cap would leave the average household having to find an extra £693," he said.
"Instead, the typical household will effectively need to find an extra £493 now"
When will I get it?
Every eligible British household will get an upfront £200 discount on their energy bill in October this year.
How will I get it?
The money will be given by the Treasury to energy suppliers who will then cut everyone's bill by £200.
The government still needs to consult on how this scheme will work but the discount will come as either a reduction on your payments or as credit on your account, but you will not need to apply for it.
Pre-payment meter customers may get a voucher.
I don't like debt. Can I not just turn it down?
Sunak has confirmed that it is not possible to opt-out.
The £200 energy bill rebate is not optional, meaning that every eligible household in the UK will have the lump sum deducted from their energy bills in October.
Can I turn the money down if I don't want or need it?
A Twitter poll by MoneySavingExpert Martin Lewis this week found that 80% of 40,000 respondents would opt-out of the rebate.
Others have tweeted directly to Rishi Sunak to request that they not be included in the mandatory rebate scheme.
One Twitter user said: "I don’t want debt hanging around my neck when there is no guarantee bills will go down during the repayment period.
"I would rather make further cuts to usage/budget than face extra costs down the road."
Can the Government not give it to someone who needs it more than me?
The payment will come automatically to every energy bill in the UK and there is no mechanism to refuse it
Experts have pointed out that the payment is 'a loan, not a gift' and said that, given the wider cost of living crisis, more support may be needed for low-income households.
Energy customers on Twitter have vented their frustrations at the government's plans, with some claiming they don't need it and others suggesting it would be better off going to lower-income households.
When does it have to be paid back by?
Everyone will have to repay the money from April 2023, with £40 automatically taken off their accounts each year for five years.
How will it be paid back?
The £200 rebate will need to be paid back in five annual instalments of £40, starting in 2023.
The deductions will be automatically applied to energy bills and customers do not need to act to pay back the loan.
Some have questioned the fairness of this and said it is not right that they are being saddled with extra charges in the future.
What happens if energy prices are still high when I have to start paying it back?
Experts have said that the repayments may result in an 'even larger burden' for households, should energy prices not start to fall by 2023.
Richard Neudegg, the head of regulation at energy bill comparison service Uswitch, said that while the energy bill rebate and council tax refund were welcome, the government needed to provide more help for those on lower incomes.
He said: 'The £200 energy bill credit will be a useful boost for households in a time of crisis, but this won't be implemented until October when energy bills may be even higher.
'Make no mistake, customers will have to find the funds to pay for it over five years - this is a loan, not a gift.'
Other energy experts have said that the extra £40 payments could prove an additional burden for households come 2023, in the event that energy prices don't come down before then.
Tashema Jackson from Energy Helpline said: 'While £200 off your energy bills in the short term is nothing to be sniffed at, it will make just a small dent to family budgets.
'For many, being saddled with this additional debt on the basis that you will have to pay it back in the future, will feel a bit like robbing Peter to pay Paul."
Our student house will have broken up by the time we have to pay our loan back. What will happen then?
The £40 instalment plan will be applied to every energy bill in the coming years, regardless of whether the household received the £200 rebate.
This means that new bill-payers, such as students or young adults moving out on their own for the first time, will still be required to pay the £40 extra per year on their energy bill from 2023.
Mr Lewis highlighted examples where some people could lose out from this rebate in his latest MoneySavingExpert newsletter.
He said five people in a shared house would get the £200 discount on their bill in October 2022 but if they then each move out and live alone from April 2023 they will be left repaying £40 each per year on a deal they didn't benefit from.
What if I move in with my partner after we have both received the loan?
You will be the lucky ones.
Even though you would both have individually benefitted from a £200 rebate, you will only have to pay pay one of these amounts, assuming you have a joint bill for your new household.
Is there any other help I could get?
At the same time as the £200 rebate, the government also announced a £150 council tax rebate for the 80 per cent of households in bands A to D.
What help is available if you can't pay your bills now?
Speak to your supplier directly first if you are struggling to pay your bill or are worried about falling behind, as many run their own support schemes.
British Gas Energy Trust , for example, runs a scheme where anyone can apply for a grant, and you don’t even have to be a customer.
Pension credit and other benefit claimants may be eligible for the Warm Home Discount - which gives you £140 off energy bills.
People on certain benefits can also get Cold Weather Payments of £25 a year when the temperature drops.
It is also worth checking with your local council for household support grants .
