How far does the €5 weekly bump to fuel allowance actually go in an energy crisis?

ON MONDAY, FUEL allowance payments to eligible households began.

The means-tested payment, designed to help households with their heating costs during the winter, will be paid to over 465,000 households across Ireland for 28 weeks.

It is paid either at a weekly rate of €38 or in two instalments of €532 each, totalling €1,064 over the entire course of the allowance.

Age Action told The Journal that it has been extensively contacted by older people who have concerns around heating their homes this winter. 

The government is under pressure to produce measures to alleviate energy costs on households in Budget 2027, which is to be unveiled on Tuesday next week. 

The weekly rate of fuel allowance was increased by €5 in January of this year and the scheme was marginally widened to take in an additional 50,000 households who are in receipt of the Working Family Payment – an income-assessed payment that provides a “financial top-up” for low-income workers with children. 

But against a backdrop of soaring energy costs, does this small increase go far enough? And what does it truly cost to heat a home?

Who gets fuel allowance?

Fuel allowance is a social welfare payment that is primarily availed of by people over the age of 66 who satisfy a means test. For those under the age of 66, you must be on a qualifying social welfare payment to receive the allowance.

There are various rules around what qualifies and disqualifies people over the age of 66 which have been queried by advocacy groups.

This year, concerns around the rate of allowance are even more pronounced, given the ever-increasing price of home heating oil and electricity, heightened by the war in Iran and closure of the Strait of Hormuz.

There is also concern that while the government increase their focus on incentivising people to retrofit their homes through a variety of grants available through the SEAI, many older people do not have the means to pay the upfront costs of retrofitting – and will not live to see the long-term energy savings that stem from retrofitting.

How much fuel does fuel allowance pay for?

It’s very difficult to quantify how far fuel allowance goes in heating people’s homes. This is for a myriad of reasons, but, put in simple terms, it’s because everyone’s home is different.

Some homes are heated by home heating oil, others by gas or electricity. Back boilers are still prevalent in rural areas in Ireland, as are stoves and open fires.

Newer homes or retrofitted homes often have heat pumps or solar panels. 

But despite the various set-ups of households across Ireland, the fuel allowance payment does not differ and is paid at a flat rate to all those who qualify.

For argument’s sake, home heating oil is used by around 700,000 households in Ireland. Most of these homes are larger, detached and located in more rural areas.

For an average three-bedroom house, 500 litres of kerosene could last for around six to 10 weeks, if used as needed during the peak winter months. Going from the higher estimate of 10 weeks, that means just under 1,500 litres of kerosene would be needed to heat a home of this type.

Prices published on Thursday by Oil Price Comparator show the national average cost is around €1.64 a litre for a 500 litre tank. The cheapest option for 500 litres of home heating oil is €788, and the cheapest for 1,000 litres is €1,575.

These vary by county.

Hypothetically, if a household were to purchase three 500-litre tanks of kerosene, at the current cheapest rate, over the course of the winter months at these prices, it would cost just over €2,350 – more than double the fuel allowance.

The scheme isn’t meant to totally cover the cost of eligible households’ heating bills – but it’s not going as far as it did in previous years.

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According to last year’s OilPrices.ie annual report, 1,000 litres of home heating oil came in around €936.

By the same example used earlier of three tanks of 500 litres, it would have averaged €480 per tank – totalling €1,440. The total sum of fuel allowance in 2025 was €924, so in this specific scenario, households would have had to cover €516 to make it so they had enough oil to live comfortably throughout the winter.

This year, based on Thursday’s prices, that cost soars to €1,286 – even with the additional €5 per week.

At the current cheapest rate of a 500-litre tank, the additional fuel allowance would cover less than 90 litres of home heating oil. 

To briefly touch on gas prices, a number of providers have recently announced large price hikes in residential gas and electricity prices from this month.

Bord Gáis, the country’s largest supplier of gas with around 300,000 customers, said a gas customer’s bill will go up by 9.3% or €11.67 on average. Rival supplier SSE Airtiricity similarly announced price hikes effective from this month.

The same three-bedroom home discussed previously will annually use around 11,000 kWh of natural gas for heat, according to Bonkers.ie. Roughly half of this will be consumed during the winter.

It’s a cheaper option than home heating oil and works out to an average of €900 for 5,500 kWh, the site said. With price increases, this looks set to face a bump of just over €80 for the winter period. It still leaves it below the total sum of the fuel allowance.

Energy poverty

Advocacy group for older people, Age Action, has urged the government to raise the weekly fuel allowance by an additional €5 in next week’s budget. It has also called for the duration of the scheme to be extended to 32 weeks.

Camille Loftus, the organisation’s head of advocacy, told The Journal that she has been extensively contacted by older people who have concerns around heating their homes this winter.

“Fuel allowance is an incredibly blunt tool. Lots of people who should be getting fuel allowance don’t get fuel allowance,” she said.

“If you’re one of the half of older people who relies on oil to heat your home, that’s not going to cut it.”

Loftus referenced the different fuel needs for heating different types of homes compared to the flat rate payment – it is Age Action’s view that the payment should be assessed in terms of the type of fuel a home needs, a person’s income and the energy efficiency of the home.

While she acknowledged the benefits of retrofitting and is fully supportive of measures by the government to make it more accessible, the upfront costs, level of work required and long-term savings for older people make it very difficult for many older people to access this.

Some older people she’s been in contact with have sat down and worked out the savings they would gain from retrofitting against the upfront investment, she said. “I’ve had a number of people say, ‘I sat down and I calculated this. In order to recoup back my investments, I’d have to live to be in this house to be 115′.

“If you have to use oil to heat your home, you’re in a pickle this year. You’re really in a difficult situation.

“I didn’t have this last year, but in the run-up to the budget this year, I am having calls from people who are really fearful of it.”

National policy manager at children’s charity Barnardos, Stephen Moffat, similarly said rising costs are a concern for many this year.

“Our concerns are about younger children and children in general, because the impact of living in homes with insufficient fuel is a real concern for a lot of families we support,” he told The Journal.

Children who live in damp and cold homes are much more likely to suffer from respiratory conditions.

Similarly to Loftus, he said for the people Barnardos deal with, retrofitting isn’t an option many can avail of due to living in rented accommodation.

“There’s been such huge fluctuations in the cost of fuel. I’m not sure if that’s going to change over the next couple of years, and unfortunately, the people who are bearing the brunt of this the most are those on lowest incomes. Research shows that lowest income families spend the highest proportion of their income on energy.”

The charity’s biggest concern on this is households “self-disconnecting”: opting not to turn on the heating for a number of days a week to save money during the winter months.

Moffat said Barnardos is currently looking at the issue of people with very young children not being classed as “vulnerable customers” by energy providers.

“Technically, at the moment, if you’ve a three-month-old child in the house, providers can cut you off. We don’t think that’s right.”