Low earners getting subsidy too

The scheme gives grants of up to $1300 for insulation. Photo / Hawke's Bay Today

Subsidised insulation is benefiting low income earners, who have received more than half of the grants so far, Energy Minister Gerry Brownlee says.

However, there are no figures available for those on middle incomes.

Mr Brownlee released figures yesterday showing 57 per cent of the 4889 homes fitted with subsidised insulation and/or clean heating in August were owned or rented by low income earners - those who were eligible for a community services card. The figures showed 49 per cent were owned, and 8 per cent rented by low income earners.

Mr Brownlee was responding to a survey of 1578 homeowners which found high earners were more likely than middle earners to say they planned to take advantage of the subsidies.

The survey prompted fears that middle earners - people paid too much to qualify for extra help but too little to pay the shortfall of about $3500 to take advantage of the insulation subsidy - would be less likely to benefit than higher earners.

The $323 million scheme gives grants of up to $1300 to insulate floors and ceilings in homes built before 2000, and $500 towards a heat pump or other energy-efficient home heating.

People eligible for a community services card receive a more generous insulation subsidy than other earners - 60 per cent of the cost compared with about 30 per cent for others.

Because the scheme is not means tested, the Government does not collect figures revealing the incomes of those that benefit, other than counting those who get the higher subsidy.

To be eligible for the higher amount, a person must earn $24,514 or less for a single person living alone, $36,618 for a childless couple, and $44,211 or less for a couple with two children, with an extra earning allowance for each additional child.

Labour's energy and climate change issues spokesman Charles Chauvel has said the survey suggested an issue as to whether the subsidy was set high enough to make it attractive to people who were not well-off, but too rich to qualify as low income.

Yesterday, Mr Brownlee said doubters of the scheme's affordability to middle earners should wait and see how it progressed over the next few months.

Grants to low earners had gone up "massively" under the new scheme compared with the Energywise scheme that applied before July 1, he said.

The old scheme gave low earners a 60 per cent Government insulation subsidy, which could be topped up to the full cost by councils and charities. However, it was not available in all regions all of the time.

The survey, which was paid for by the Business Council for Sustainable Development, appeared to support anecdotal evidence that demand for grants will exceed the 180,000 homes budgeted for.

Mr Brownlee said there was a strong possibility that funding earmarked for the fourth year of the scheme would be brought forward to cater for strong demand.

The survey, which was income-weighted, found that a third of respondents earning between $100,000 and $150,000 planned to apply for help with ceiling and floor insulation and a half said they would apply for help with home heating.

Of respondents earning between $50,000 and $70,000, 13 per cent planned to apply for insulation help and 12 per cent for heating help.