COVID-19 CASH: And how you can get some money back
Payment holidays, refunds, discounts... discover what help is available in this brutal financial crisis
COVID-19 is wreaking havoc with our finances. But many companies are helping out by giving us refunds and rebates for the goods and services we can’t use in the lockdown. Others are allowing payment holidays on insurance and bank loans to ease the financial pain. And there are plenty of ways to save cash too on top of those badly needed rebate and refund boosts.
However, airlines look set to wriggle out of their obligations to give us our money back for cancelled flights.
Here’s the latest on who is giving back what – and what you should do not to miss out.
FLIGHTS
Chaos and confusion has reigned among airlines, travel agents and passengers, few of whom seem, to have actually got their money back for flights cancelled due to Covid-19.
Consumer watchdogs such as Which? have rightly pointed out that cash refunds are a basic right under EU law.
Yet with over €230bn worth of flights cancelled and airlines in financial crisis, getting money for cancelled flights was like getting blood out of stone.
Initially, Ryanair, of all airlines, was giving back money, or at least offering to do so.
Then it stopped doing that and started pushing vouchers on passengers instead, although it did offer to exchange them for cash if not used within 12 months.
It soon emerged why: moves were afoot to seek EU approval for airlines to suspend the refund rights of passengers and give vouchers instead. So why should Ryanair hand out cash when few other airlines would?
This week, those moves led to a letter from 11 EU transport ministers – including our own Shane Ross – pointing out the financial difficulties that would ensue from forcing airlines to hand over billions in refunds at this point.
Whether they agree to suspend consumer rights to refunds remains to be seen. But in the meantime, they won’t be in any hurry to hand over cash.
ENERGY
On Thursday, Energia said it will reduce gas prices by 12 per cent and electricity prices by 3 per cent for customers, effective from next June 1.
Energia gas customers will save, on average, €94 per year and electricity customers will save €28 per year. Dual fuel customers – who get both as a single package – will save an average of €122 per year,
The reductions will be in addition to any existing discounts that customers can benefit from.
The discount applies to new and existing customers and will be automatically applied post June 1 on their next full bill.
That’s good news for Energia customers and other suppliers should follow suit after oil and gas prices plummeted due to lack of demand in the lockdown.
But you could save hundreds more on top of that just by using a comparison site to get the best deals.
With so many of us in lockdown and working from home, our utility usage is going up. Any rise in costs should be offset by falling energy prices, but you could save hundreds more by switching suppliers, especially now that a competitive shakeup is underway.
‘There are some big savings up for grabs if you switch to the cheapest deal – up to €363 a year for the average consumer,’ says Eoin Clarke of switcher.ie.
See switcher.ie and bonkers.ie to compare the best deals.
Another option is One Big Switch website, which uses the clout of 64,000 households to get better deals for members, who can join for free.
CAR INSURANCE
Some companies are ‘playing fair’ and giving refunds to customers to help them through tough times.
These include at least six motor insurers to date. Allianz, Axa, FBD, RSA, Liberty and Zurich.
Allianz, for example, has just announced it is to give a €30 refund to its private car, van and taxi customers. Customers will not have to do anything to receive the payment, the insurer said.
Axa says it will provide rebates of up to €20m for its 600,000 customers.
That would work out at around €33 per customer on average but the details are not yet known.
Liberty Insurance seems to be a bit more generous in returning 15 per cent of premiums.
But each customer will have to ask first before getting the rebates of premiums for two months from June 8 via the insurer’s website.
Customers can either claim the refund through a ‘cash equivalent voucher’ or they can ask the company to donate it on their behalf to a charity assisting with the frontline response to Covid-19.
If the money is not collected during the timeframe, each customer’s entitlement will be automatically given to charity.
The rebates announcement came after a meeting between insurers and Finance Minister Paschal Donohoe, where he pointed out that drivers have not been using their cars in the lockdown, leading to a huge decrease in claims.
But on that basis, shouldn’t he also give us rebates of motor tax? There hasn’t been a peep out of him about that.
HEALTH INSURANCE
All health insurers are giving back money to customers. You don’t have to do anything to claim them back.
The rebates are sizable. Here’s what’s happening for three months (although this may be extended):
VHI: 50 per cent reduction in premiums. IRISH LIFE HEALTH: between 36 per cent and 60 per cent of premiums reduced for high-priced plans and 17 per cent and 21 per cent cuts for basic plans. LAYA HEALTHCARE: cashback of up to €195 for adult members and €60 for every child member. A family of two adults and two children would be refunded a total of €510.
That’s good news for customers. But you also should review your policy and your needs regularly or you’ll lose out – now more than ever. The advice from experts totalhealthcover.ie is not to cancel cover, and the ongoing rebates will help encourage that. They may even be extended.
Families or couples can also save thousands just by switching policies with little if any loss of cover if you play your cards right. Prime candidates for saving money are those on the VHI’s old Plan B Options – now called Health Plus Extra – which is well past it’s sell-by date.
Totalhealthcover.ie’s Dermot Goode also advises that around 50,000 people who took out health cover to avoid age-penalties when they came in almost exactly five years ago, are now on poor value plans.
That’s because they bought the cheapest plans at the time, which have been gradually increased in price since then.
LIFE INSURANCE
INSURERS have warned that critical illness policies won’t cover
Covid-19 as it is a new disease and unlikely to specified among the conditions covered by critical illness insurance.
Nonetheless, people with life and critical illness cover have been advised to do their utmost to keep their policies going even if in financial difficulty.
For those with cash problems, many insurers will offer either a payment holiday or a reinstatement option.
‘A payment holiday will allow you to defer your monthly premium for a certain amount of months without losing cover on the policy (typically up to three months), so a valid claim during the payment holiday would still be covered under the policy,’ Insurance Ireland advises.
‘Other policies include a reinstatement option that allows the policy to be reinstated after a period of missed payments with little or no updated underwriting required.’
A premium holiday or a reinstatement option are not free insurance cover as you will be asked to pay the premiums missed at the end of the period. You should contact your insurer as soon as possible to discuss your current situation to understand the options that are available to you.
Full details are on the website insuranceireland.eu.
COMMUTER TICKETS
Holders of TaxSaver commuter tickets are set to receive refunds or extensions in a deal hammered out by the National Transport Authority and transport companies.
Those out of work will be offered a refund to cover the remaining period of the ticket from when travel restrictions kicked in, the NTA announced on Friday.
Commuters still at work will be offered free travel. This applies to services on Dublin Bus, Go-Ahead Ireland, Bus Éireann, Iarnród Éireann and Luas. On returning to work, or on expiry of the ticket, they’ll be offered a choice of taking the months-in-lieu immediately, or using them at a later date.
‘Where the customer wishes to receive a refund rather than a replacement ticket, it is still open to them to make such a request via their employer,’ it said.
BANK BORROWING
IF your pay has fallen significantly, it may make sense to take a mortgage holiday. However, it’s only worth using if you really need to.
Some banks have just extended the three-month mortgage holiday to allow six-month mortgage breaks. Taking a six-month break from a €250,000, 25-year mortgage at Bank of Ireland’s penal 4.5% standard rate would save you €1,390 a month.
But doing so would add considerably to your monthly repayments later, or extend your mortgage period.
If you can afford to hang in there, you’d be better off switching mortgages to cheaper lender like ICS (a subsidiary of BoI) whose 2.95 per cent rate would cost just €1,179 a month for the same mortgage, €211 a month less.
Check out and compare deals on bonkers.ie or ccpc.ie or talk to a mortgage broker.