A worked example
35.A worked example of the calculation required by section 3 follows, based on the entirely hypothetical figures set out in this paragraph. The 2017 minimum income standard figures are used, but with weekly sums being converted to monthly figures.
| Household type: single person of working age (living on the mainland in an urban area or accessible small town or in an accessible rural area) | ||
|---|---|---|
| Household costs (monthly): | £1,150 | net income |
| £350 | rent | |
| £50 | council tax, water & sewerage | |
| £0 | childcare | |
| £0 | relevant benefits | |
| £80 | assessed monthly fuel needs (taking into account the tariffs and fuel types available to the household in question) | |
| Minimum income standard figures: | £1,286.24 | total income |
| £388.70 | notional rent cost | |
| £68.28 | notional council tax cost | |
| £24.99 | notional water rates cost | |
| £71.41 | notional fuel costs | |
| £0.00 | notional childcare costs | |
36.The section 3(1)(a) test is as follows—
| Fuel costs necessary to satisfy section 3(2): | £80 | |
| Adjusted net income: | £1,150 | net income |
| (£350) | rent | |
| (£50) | council tax, water & sewerage | |
| -------- | ||
| £750 | ||
| Fuel costs as percentage: | (80 / 750) * 100 | |
| = 10.7% | ||
| As the percentage is above 10%, the first element of the fuel poverty test is met. | ||
37.The section 3(1)(b) test is as follows—
| Remaining adjusted net income: | £1,150 | net income |
| (£350) | rent | |
| (£50) | council tax, water & sewerage | |
| (£0) | childcare | |
| (£0) | relevant benefits | |
| (£80) | necessary fuel costs | |
| -------- | ||
| £670 | ||
| This figure then needs to be assessed in accordance with section 3(5) on the basis that the home in question is not located in a remote rural area, remote small town or island area. | ||
38.The section 3(5) comparison is as follows—
| Relevant minimum income standard: | £1,286.24 | minimum income |
| (£388.70) | notional rent | |
| (£68.28) | notional council tax | |
| (£24.99) | notional water rates | |
| (£0.00) | notional childcare | |
| (£71.41) | notional fuel | |
| -------- | ||
| £732.86 | ||
| 90% of that standard: | (£732.86 / 100) * 90 | |
| £659.57 | ||
| As the remaining adjusted income of £670 is greater than the relevant MIS figure of £659.57, the household is not in fuel poverty. | ||
| However, if the home in question had been located in a remote rural area, remote small town or island area, the result may have been different. If the additional amount calculated in relation to the household type for that area was £20, that sum would need to be added to the figure of £659.57 above, meaning that the total would instead be £679.57. As the remaining adjusted income of £670 would then be less than the minimum income standard which applies in that area, the household would be in fuel poverty. | ||
