CHILDLESS households will miss out on the $150 rebate on electricity bills that Barry O'Farrell is promising.

The man expected to be the next Premier is about to drive a wedge through the state with his household rebate promise based only on those receiving Family Tax Benefit part A or B. Single people and couples without children earning up to $150,000 a year will not get the rebate, he confirmed.

The policy segregation will mean that 600,000 households promised $250 electricity bill rebates in the unlikely event Labor would be re-elected will miss out.

Only childless couples and singles who are eligible for Commonwealth Health Care cards - the unemployed or seniors - will receive a rebate.

Liberal sources confirmed it was the perceived cost of the promise which caused Mr O'Farrell to limit it to families with children earning up to $150,000 a year.

Mr O'Farrell is also staging the rebate with a $75 rebate for families in July 2012, $125 in July 2013 before scaling up to $150 in 2014.

"We would like to offer rebates to more people but given Labor's 16 years of mismanagement of the state's finances, we have to target those most in need who are families, pensioners and low income earners," Mr O'Farrell said yesterday.

The revelation of the selectiveness of the rebate comes as Treasury advice shows that the rebate promise is underfunded by at least $135 million.

Mr O'Farrell has promised to pay for the scheme by merging the three electricity distribution businesses, which he says will save $400 million over four years. Treasury advice given to the Government on December 9 concerning a possible merger of distribution businesses said that savings would be hard to achieve and, at maximum, would be $265 million over four years.

"It is likely that in the short term there would be cost increases in implementing the merger as opposed to savings," the advice says.

Originally published as Single, childless? No power rebate