Energy discount: Tenants fear they could miss out on a £400 rebate |  energy bills

Energy discount: Tenants fear they could miss out on a £400 rebate | energy bills

When Rishi Sunak recently announced a £400 rebate on electricity bills for every household, there was a group of energy customers wondering how they were going to get their money.

While customers who pay by direct debit or check will get a credit on their electricity bill starting in October, and prepayment meters expect a coupon or credit, renters who have meters in their rooms and pay a third party for their electricity fear missing out.

A Guardian Money reader came forward to tell us about his situation. He is one of several tenants in an apartment building (HMO). They each have a prepayment meter in their room and buy codes online from the company that runs it. This forwards the money to your landlord, who pays the energy supplier for the electricity for the entire property.

The reader says he has a very good landlord and would not be surprised if his share of the £400 rebate was passed on to him and the others. But he wondered what the rules were.

“There are eight tenants in this house, all with prepayment meters. As I understand the situation none of the tenants can get the £400 subsidy as neither of us receive a bill from an energy supplier,” he wrote.

“I can imagine the same situation applies to many thousands of renters across the UK and many, like me, will be people of very limited financial means.”

Chris Norris, the director of policy at the National Residential Landlords Association (NRLA), expects landlords to receive guidance from the Treasury Department on how to redistribute money, but there are also protections for tenants.

“Landlords who resell energy must not make a profit from that resale – if they do, they could be taken to small claims court,” he says.

He says landlords could lower rents to get the money back to tenants, or give out coupons or checks.

“If you’re on good terms with your landlord, I would suggest calling them up and asking what they’re going to do when the money comes in,” he says.

“If you don’t have such a good relationship, you should keep an eye on the unit price and log the expenses.”

The unit price for a prepaid meter is set by the landlord. If the price stays the same after October and there’s no sign of another payment from your landlord, you should ask about the discount, Norris says.

Citizens Advice has information on its website about what landlords can and cannot charge for energy.

It clarifies that your landlord can only bill you for gas or electricity if your lease says so, and they can’t bill you for energy if you pay your supplier direct.

The charity says your landlord can only charge you for the energy units you use, your share of the basic charge and VAT. This is called the maximum resale price and your landlord cannot force you to pay more.

Any third-party meter fee will likely be charged directly at the time of charging.

But the charity says the landlord doesn’t have to pass the discount on to tenants.

And it adds that in some cases, the supply of electricity to such properties is done under a non-household contract, in which case no rebate is paid a priori.

Houses or apartment buildings or HMOs often have individual prepayment meters for each room. Photo: John Giles/PA

When we questioned Ofgem and the Treasury on the matter, we were told consultations were ongoing on how the rebate would be handled and that guidance was due to come in the summer.

There are around 500,000 HMOs in England and Wales, but it is not known how many tenants pay for their energy through sub-meters.

Ofgem’s figures for prepaid customers do not include any of these sub-counters – they only cover households that have a direct relationship with an energy company.

Norris says he expects more landlords to switch to third-party prepayment meters if energy prices continue to skyrocket because it’s easier than trying to figure out how much to include in tenants’ bills.

“Rather than having to set rents according to October prices without knowing what’s going to happen next year, they might decide it might be fairer to try and find some kind of dynamic pricing, and the meters provide that,” he says .

On May 26, the Chancellor announced a £15 billion package of measures to help UK households deal with inflation. This includes discounts on energy bills. The government originally announced a £200 loan that would have to be repaid over five years. However, that idea has now been scrapped and replaced with a £400 rebate or grant that does not have to be repaid.

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