More than eight million households across the UK will receive a cash payment from July to ease the rising cost of living pressures, as the Work and Pensions Secretary Thérèse Coffey sets out detailed plans today.
The first instalment of the £650 for qualifying low income households in Scotland, England, Wales and Northern Ireland, will land in bank accounts from July 14, continuing to the end of the month.
The move will see households initially £326 better off as the UK Government delivers significant interventions to support groups who are most vulnerable to rising inflation and soaring energy bills - in total, millions of households will receive at least £1,200 this year to help with the cost of living.
Work and Pensions Secretary, Thérèse Coffey said: “With millions of the lowest-income households soon seeing the first of two cash instalments land into their bank accounts, we are taking action to directly help families with the cost of living.
“This one-off payment totalling £650 is part of our £37 billion cost of living support package that will put an extra £1,200 into the pockets of those most in need.”
Chancellor of the Exchequer, Rishi Sunak added: “We have a responsibility to protect those who are paying the highest price for rising inflation, and we are stepping up to help.
“In July over 8 million people will get their first £326 payment to help with rising prices, as part of a package worth at least £1,200 for vulnerable families. I said we would stand by people when they needed help, and we are.”
The second instalment of £324 will be sent to qualifying low income households in the Autumn.
The payments are designed to be deliberately slightly unequal to minimise fraud risks from those who may seek to exploit this system.
The eligibility date for the second instalment will be announced soon.
Low-income households are benefiting from UK Government support in a variety of different ways this year as global inflationary pressures, exacerbated by the unjust war in Ukraine, have caused prices to rise for several essentials.
UK Government support includes the direct payment of £650 for over 8 million households on benefits, a separate £300 payment for pensioners, and a £150 payment for disabled people, which can be paid on top of the £650 payment.
This is on top of £400 for all households to help with energy bills, and an extra £150 for properties in Council Tax bands A-D, meaning millions of the lowest-income households will receive at least £1,200 in support this year.
This is all in addition to changes to the Universal Credit taper rate and work allowances worth £1,000 a year on average for 1.7 million working claimants, a rise in the National Living Wage to £9.50 an hour, and a tax cut for around 30 million workers through a rise in National Insurance contribution thresholds from July 6.
Below are key dates and qualifying criteria for the three different one-off payments and £400 energy discount for domestic users - nobody needs to apply for any of the new support, they will all be paid automatically.
July and autumn
£650 one-off payment for people on means-tested benefits
The ‘Cost of Living Payment’ of £650 will be made in two instalments for households on means-tested benefits.
People on these benefits will receive the payments:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
The Department for Work and Pensions (DWP) will make the payment in two lump sums - the first from July 14 and the second in the autumn.
If you are in receipt of Tax Credits AND a means-tested benefit on the list from DWP, you will receive £326 from July 14.
If you only receive Tax Credits, HMRC will pay the first instalment in the autumn and the second in the winter - exact details have still to be confirmed.
You can read the new guidance on GOV.UK here.
How to qualify for the payment:
- To be eligible for the first of the two instalments claimants will need to be in receipt of one of the benefits listed above, or have started a claim which is later successful, as of Wednesday May 25, 2022
HMRC and DWP will set out the eligibility date for the second instalment soon.
Other key points about the payment:
- This payment will be tax-free
- It will not count towards the benefit cap
- It will not have any impact on existing benefit awards
How will payments be made:
- Directly to households across the UK
September
£150 one-off payment for people on disability benefits
The £150 ‘Disability Cost of Living Payment’ will be paid to people on disability benefits in September.
People on these benefits will receive the payment:
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Attendance Allowance
- Adult Disability Payment (Scotland only)
- Child Disability Payment (Scotland only)
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
How to qualify for the payment:
- To be eligible for the £150 one-off payment, claimants must be in receipt of the benefits listed above, or have started an eventually successful claim for one of these benefits as of May 25, 2022
Other key points about the payment:
- Disability benefit claimants who also receive means-tested benefits, will get the £150 on top of the £650, but they will be paid separately
- Payments will be exempt from tax
- They will not count towards the benefit cap
- Payments will not have any impact on existing benefit awards
How will payments be made:
- Payments will go directly to eligible people across the UK
October
£400 discount off energy bills
The UK Government will pay the £400 directly to energy suppliers who will deliver this support to households with a domestic electricity meter over six months from October.
Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher - this will depend on whether they have a smart meter or not.
Who qualifies for the £400 energy bill grant:
- Domestic energy users in Scotland, England and Wales - equivalent support will be delivered to people in Northern Ireland
Other key points about the payment:
- The £400 does not need to be repaid
- This support is on top of the £150 Council Tax rebate for households in bands A-D (and with a reduction in Scotland), which was announced in February, and which millions of households have already received
How will payment be made:
- Directly to energy suppliers - you do not need to apply for it
November/December
£300 one-off payment for people of State Pension age
All eligible pensioner households will get the one-off ‘Pensioner Cost of Living Payment’ as a top-up to their annual Winter Fuel Payment in November/December.
Who qualifies for the £300 ‘Pensioner Cost of Living Payment’:
- People will be eligible for this payment if they are over State Pension age (aged 66 or above) between 19-25 September 2022 and in receipt of the Winter Fuel Payment
Other key points about the payment:
- The £300 will be paid on top of any other one-off support a pensioner household is entitled to, for example where they are on Pension Credit or receive disability benefits
- The payment is not taxable
- The payment does not affect eligibility for other benefits
Who does not qualify?
- There are certain circumstances where an individual above State Pension age does not qualify for the Winter Fuel Payment which can be found on GOV.UK, here
How will payments be made:
- Directly to households across the UK
You can read detailed examples of how the additional support packages will affect different types of households on he GOV.UK website here.
Where to get help and advice
If you are unsure if you qualify for a one-off payment, or have a mixed household, seek professional advice from a non-profit organisation such as Citizens Advice, Advice Direct Scotland, Christians Against Poverty, Turn2Us and StepChange.
To keep up to date with the cost of living crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
