Energy bills are rising at an eye-watering rate with a further hike expected in October when the energy price cap is set to increase again and push bills even higher.

As part of efforts to help households manage the escalating cost of gas and electricity, every home is to be given £200 off their electric bill this year.

However the discount is only temporary and from next April households will need to start paying back their grants in £40 instalments.

But the scheme has come in for some criticism, most notably because households won't be able to opt out should they not want to take the grant or be saddled with the repayment plan and anyone who takes on their own property during the five-year payback period may face returning money for a loan they never benefited from.

The government, which first announced proposals for the flat-rate payment back in February, says it is now working on the finer details ahead of the roll-out but here's everything we know about the terms of the plan so far:

What is the Energy Bills Support Scheme?

It's been described as a rebate, a loan, a credit and a grant but through the Energy Bills Support Scheme domestic electricity customers will be given a £200 temporary reduction in electricity costs from this October.

How and when will I get my £200?

All households with a domestic electricity connection will be automatically eligible for the £200 reduction that is expected to be passed on as a lump sum. Customers do not need to apply for the money or fill out any forms and in most cases the government expects that suppliers will just automatically apply a £200 credit to bills from this October.

Does the money cover the extra in energy bills or the expected second rise this October?

Sadly, the answer here is no.

Because of wholesale rises to the price of gas and electricity, high demand through the pandemic and most recently the war in Ukraine, worldwide prices are volatile and for now only expected to keep on rising and we're seeing this being reflected in the prices customers are being charged by suppliers.

Energy bills from this April are rising by more than £600 a year if you have an average sized bill - but could be more or less depending on your home's usage - and the price cap (which is the maximum amount the government lets suppliers charge customers) is permitted to rise again in October possibly by another 30% and therefore adding a second increase to most bills ahead of the winter.

This £200 grant - or loan - won't cover this April's rise and/or the expected second increase in October. But ministers say this money, combined with the £150 council tax rebate households are soon going to begin receiving, will give households £350 in total to put towards the big rises in gas and electricity prices most will see this year.

I use a pre-payment meter will I get the money?

The government says it is now designing exactly how money will be distributed and there could be some variations in how households get the cash depending on how they pay for energy - for example whether this is through direct debit or a pre-payment meter. However ministers have said everyone will be entitled to the help so if you have a domestic electricity meter you too should receive the £200 reduction on some way, shape or form.

Previous schemes like this have used vouchers for pre-payment customers in order to reach everybody fairly - but the government is working with Ofgem now on the finer details.

Am I getting into debt?

The government says the money is not a loan, and considered to be more like a grant. There will be no interest due on the sum being handed out, no debt attached to the £200 you've been given and it won't affect your credit rating.

Ministers describe the scheme as a 'universal measure to help households smooth out the increased costs of energy bills at a time when they are particularly high'.

Giving out the £200 says the government, should help people spread out the increase in energy bills over a few years because you will take the £200 now when bills are at their highest but then pay the money back over the course of the next five years, beginning in April 2023 when it is hoped there could be some small reductions in the cost of gas and electricity.

If I pay for energy as part of my rent will my landlord pass on the reduction?

Those responsible for the design and roll out of the scheme say they recognise that there will be certain situations where a third party will be responsible for the bill - and be named on it. In these instances, any charges are then passed onto the 'end user' typically through all inclusive rent or pitch charges for example in those living in park homes.

"We will explore this issue as we continue to develop the policy and we will be gathering more evidence when we launch our consultation" says the government's current explanation of the scheme and more details are expected.

I don’t want or need this, can I opt-out?

As it stands there is no opt-out option, either for those who don't need the £200 help and would prefer to absorb the higher cost of energy in their budgeted outgoings or for those who would rather not spend the next five years paying it back.

Ministers say everyone will be automatically eligible because it wishes to design a scheme that is simple to deliver and so reaches the maximum number of people possible without too many unnecessary administration costs.

In a video on his Money Saving Expert website, consumer champion and television presenter Martin Lewis explained to his followers that there is likely to be no alternative but to take the money.

He said: "What will happen is this - in October, on every single electricity bill in England, Scotland and Wales, you will either have your bill reduced by £200, or you'll be given a bill-credit. If you're on prepay, they'll pay it through your smart meter or they'll give you a voucher or a cheque.

"This is going to happen. There is no choice about it. It is not optional and it is going to happen automatically on every single bill."

A petition, demanding that customers be allowed to refuse the £200 energy rebate, has been set up and received 10,000 signatures so far. Learn more here.

How is this money paid back?

The £200 you are given as a credit on your energy bills is going to need paying back and this is expected to start in April 2023 with the first instalment.

While there will be no interest applied to the £200 it is expected that all households will see their energy bills increased by £40 a year, for the next five years, beginning next April to collect and recoup the money that has been handed out.

What if I move house or switch supplier?

All suppliers, working with Ofgem, will be applying the £200 reduction to all electricity bills from this October. And the costs will then be recouped - again directly through people's bills - from 2023 and over the next five years.

So it doesn't matter whether you switch tariffs, suppliers or you move home - providing you still have a domestic electricity supply you will get the money this October but also begin paying it back from next spring because the same rules are being applied to every bill.

What happens in shared houses if someone moves out or my adult children leave home?

The issue of shared housing, or adult children moving into their own place, has been one aspect of this new plan which has come in for some considerable criticism.

Everyone with a domestic electricity supply is to get the £200 reduction but therefore everyone who receives an electricity bill will also help pay it back from next April - and there will be circumstances where bill payers are paying an extra £40 a year for something they perhaps never directly received in the first place or potentially only took a small share of, if they split bills in a shared property.

If you live in a shared house, as a collective you'll benefit and receive the £200 grant, but if one or all of you go separate ways from next April you too will see the £40 increase applied to your new bills in your new home. And the same for adult children still living at home when the £200 grant is applied. While their parents will have taken that reduction, if they move out at any point in the next five years they will contribute to the overall repayment (as will their parents) despite having never personally collected the £200.

What if I move in with someone after getting the £200?

It is likely that you will be among the lucky ones and benefit more than others from the way that the scheme will have to be rolled out.

If you are part of a couple, and in October you each receive the £200 grant because you are living separately but by Christmas 2022 decide to move in together you won't be expected to return £400 from the following April.

As the repayment plan is connected to people's bills, just like those moving out stand to lose out financially, those combining their households and taking on one set of energy bills will potentially stand to be benefit as they will only pay off one £200 grant through the £40 increase that will be applied for the next five years.