More than seven million households across Scotland, England and Wales are set to receive a £301 cost of living payment from next week from the Department for Work and Pensions (DWP). However, updated guidance clarifies who will receive the first part of the £900 means-tested payment, even if they have a ‘nil’ award.
Payments are due to arrive between April 25 and May 17, for some 7.2 million people on Universal Credit, Pension Credit, Income-based Jobseeker’s Allowance (JSA), Income-related Employment and Support Allowance (ESA) and Income Support. A further 890,000 people on Tax Credits-only will receive the money between May 2 and 9, directly from HM Revenue and Customs (HMRC).
The update on GOv.UK clarifies that you will not get a £301 cost of living payment if your benefit is reduced to £0 if you got a ‘sanction’ because you did not do something you agreed to in your Claimant Commitment. However, you might still be due the payment if you had a 'hardship payment' as a result of the sanction during the qualifying period.
Payments will appear on accounts as ‘DWP COLP’, along with the claimant’s National Insurance number. Remember, payments are made automatically, which means nobody needs to apply for the money.
Below are the details about the qualifying period and qualifying benefits.
Qualifying benefits for £301 payment
The £301 cost of living payment will be made to eligible households receiving the following benefits:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Pension Credit
- Working Tax Credit - paid by HMRC if no other DWP means-tested benefit is also claimed
- Child Tax Credit - paid by HMRC if no other DWP means-tested benefit is also claimed
This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
Benefits that do not qualify for £301 payment
You will not get a payment if you are only getting:
- New Style ESA
- Contributory ESA
- New Style JSA
Joint claims
If you have a joint claim on the qualifying dates, a single payment of £301 will be sent using the same payment method, if you’re eligible.
Universal Credit eligibility
You are eligible for the £301 cost of living payment if you were entitled to a payment, or later found to be entitled to a payment, of Universal Credit for an assessment period that ended in the period January 26, 2023 to February 25, 2023.
Universal Credit ‘nil awards’
The updated guidance on GOV.UK explains: "You will not be eligible for the Cost of Living Payment if your benefit is reduced to £0 for the qualifying period. This is sometimes called a ‘nil award’.
Reasons your benefit may be reduced to £0 include:
- you got more than one payment of earnings in your Universal Credit assessment period
- your or your partner’s earnings went up
- your or your partner’s savings went up
- you started getting another benefit
- you got a ‘sanction’ because you did not do something you agreed in your claimant commitment
You may still be eligible for a Cost of Living Payment if your benefit is reduced to £0 and one of the following applies:
- money was taken off your benefit for other reasons, such as payments of rent to your landlord or for money that you owe
- you had a hardship payment because you got a sanction and could not pay for rent, heating, food or hygiene needs
Pension Credit and other income-related benefits
Guidance on GOV.UK explains that people on Income-based JSA, income-based ESA, Income Support and Pension Credit will be due the £301 payment if they were entitled to a payment - or later found to be entitled to a payment - of those benefits for “any day in the period 26 January 2023 to 25 February 2023”.
It adds: “You are also eligible if you are entitled to one of these benefits for any day during this period but you do not receive a benefit payment because your entitlement is between 1 penny and 9 pence.”
New Pension Credit claims and £301 payment
The DWP is also encouraging low-income pensioners not already getting Pension Credit to check their eligibility, as they can still qualify for the £301 cost of living payment if they make an application for Pension Credit application before May 19, 2023 which later turns out to be successful.
This is because Pension Credit is a retrospective benefit that can be backdated by up to three months, taking it to within the qualifying period (January 26 - February 25).
People can check their eligibility for Pension Credit using the online calculator on GOV.UK here or by calling the Pension Credit helpline on 0800 99 1234.
Tax Credits
People on Working Tax Credits or Child Tax Credits and a qualifying DWP benefit will receive their payment from DWP between April 25 and May 17, 2023. For those in receipt of Tax Credits-only, the payment will be made through HMRC between May 2 and May 9, 2023.
You will be eligible for the £301 payment if you received a payment of Tax Credits for any day in the period January 26, 2023 to February 25, 2023, or you are later found to have been entitled to a payment for this period.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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