The impact of the 2018 Families Package Winter Energy Payment policy

This paper analyses the effects of the Winter Energy Payment (WEP), that was introduced as part of the 2018 Families Package. The WEP amounts to a relatively small fraction of receiving households’ income and total expenditure (nearly 7% of main benefit support on average, 5% of total income support, and about 4% of total household income and expenditure); but is a substantial fraction of energy expenditures (120% on average, and 60% median). We focus on four sets of analyses: the WEP effects on recipient expenditure patterns (particularly on power) and self-report measures of wellbeing; whether WEP affected health outcomes, as measured by hospitalisations; the financial incentive of WEP to be on a main benefit during the winter months; and whether WEP had any effect on the receipt of hardship grants. Our analyses find predominantly statistically insignificant effects of the WEP across each of these outcomes, either because the effect sizes or the samples are relatively small, making it difficult to draw definite conclusions. However, the direction of estimated effects are generally suggestive that the WEP caused recipient households to increase their expenditures on electricity and power, alleviated material hardship and improved wellbeing, and positively affected health outcomes. We find little evidence of any increase in benefit receipt in response to the increased financial incentives of the WEP to be on-benefit.