inancial experts have warned that more than 1 million households are set to miss out on Rishi Sunak’s £150 energy bill rebate.
The Chancellor announced last month that a majority of families will be handed £350 to help soften the blow of surging energy bills which will rise by 54 per cent to almost £2,000 a year from April.
The Treasury support package, worth a total of £9 billion, is made up of an automatic £200 discount on energy bills which has to be repaid and a one off £150 council tax rebate, available from next month.
But according to the Independent Office for Budget Responsibility, seven per cent of households are unlikely to claim the payment because they don’t pay the local authority charge by direct debit.
With 20 million households eligible, the OBR says that could equate to around 1.4m households missing out on the rebate.
The Government’s fiscal and economic watchdog notes that while the Treasury has accounted for the full take up of the scheme at a cost of £2.9 billion, failure to distribute the rebate to all eligible households could mean a saving of £200million for Mr Sunak.
“While for direct debit payers the rebate is deducted automatically, for others it relies on them being contacted by their council and ‘invited to make a claim’,” the OBR says.
“The overall level of take-up therefore depends on the proportion that pay via direct debits and the take-up among other council tax payers.
“We assume 80 per cent take-up among those that do not use direct debit. This implies that around 7 per cent of the total £2.9 billion spending allocation will not be paid out to eligible households, amounting to £0.2 billion.”
The Government insists there are other ways the rebate can be paid to people including using Post Office vouchers or a credit against council tax liability for those who don’t wish to share bank details.
Mr Sunak has come under fire for not doing enough in his Spring Statement on Wednesday to alleviate the pressures being faced by millions of families as energy, fuel and food prices soar.
Despite raising the threshold for National Insurance and announcing a plan to cut the basic rate of income tax by 1p in 2024, the Chancellor has pressed ahead with a 1.25 percentage point rise in National Insurance along with other tax rises which economists say will leave many people worse off.
On Thursday Mr Sunak hinted he may do more in the autumn to help those struggling with their bills when the energy price cap is forecast to rise again to perhaps as much as £2,800.
On the uptake of the council tax rebate already announced by the Chancellor, the Government said it was confident all those eligible will “receive their payments in good time”.
A spokesperson added: “Direct debit is the quickest and easiest way to pay council tax, and the best way for most people to get the rebate.
“Councils are responsible for making sure eligible households who don’t pay their council tax by direct debit receive the rebate and we have suggested a range of payment options for them to use.”