HM Revenue and Customs (HMRC) has announced that over one million households currently receiving Tax Credits, and no other means-tested benefits from the Department for Work and Pensions (DWP), will receive the £301 cost of living payment between May 2 and 9, 2023.
Newly updated guidance on the UK Government’s dedicated cost of living page states that payments will be made automatically, so there’s no need to apply. You will be eligible for the first part of the £900 means-tested cost of living support 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.
The payment will show as ‘HMRC COLS’ in bank and building society accounts, so that they know the money is cost of living support. HMRC said people might find that their payment is delayed if they have recently closed the bank account into which their Tax Credits are usually paid.
For joint claimants, where one person receives Working Tax Credit and the other receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
If people on Tax Credits believe they are eligible but have not received a payment between the published payment dates, they should wait until May 16, 2023 at the earliest to contact HMRC. This is to allow time for their account provider to process the payment.
The payment is tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
Chief secretary to the Treasury John Glen, said: “Higher prices make life difficult for everyone, which is why our priority is to halve inflation this year.
“But we are also going further to support those struggling most, with a total package of support worth an average of £3,300 per household this year and next - including up to £900 in direct cash payments starting next month for families receiving tax credits.”
Angela MacDonald, HMRC’s deputy chief executive and second permanent secretary, added: “The £301 cost of living payment will deliver vital financial help to eligible Tax Credit customers across the UK.
“Further support will be paid in Autumn 2023 and Spring 2024 to those entitled to payment.
“HMRC will pay eligible Tax Credit customers automatically and with no action required from the customer, to make this as simple and helpful as it can possibly be.”
DWP recently confirmed the payment window for the £301 means-tested cost of living support will help more than eight million households and will land in bank accounts between Tuesday, April 25 and Wednesday, May 17.
The £301 payment will be sent out automatically to the account used by claimants for their qualifying benefit, which means nobody needs to apply for the financial support - if you receive a text, email or phone call asking you to make a claim for any cost of living payment, it is a scam. Payments will appear on accounts as ‘DWP COLP’, along with the claimant’s National Insurance number.
To be eligible for the £301 cost of living payment from DWP, you need to have been entitled to a payment for one of the qualifying benefits listed below between January 26, 2023 and February 25, 2023, or payment for an assessment period ending between these dates.
Qualifying benefits for £301 payment
This will be paid 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 - will be 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.
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