HM Revenue and Customs (HMRC) has confirmed that around 1.1 million families receiving Tax Credits will get their first Cost of Living Payment from Friday, September 2. This £326 UK Government payment will be made automatically into eligible Tax Credit-only customers’ bank accounts between September 2 and 7.
These next round of payments are for people only claiming Working Tax Credits or Child Tax Credits. Tax Credit claimants who also receive benefits from the Department for Work and Pensions (DWP) will have already received their first Cost of Living Payment for £326 from July 2022.
This latest payment means that more than eight million eligible households in receipt of a means-tested benefit will have received the first of two automatic Cost of Living payments. The second means-tested payment of £324 will be issued later this year - from the autumn for DWP benefit claimants, and from the winter for Tax Credit-only customers.
Eligibility for £326 Tax Credits-only cost of living payment
To qualify for the Tax Credits-only £326 Cost of Living Payment in September 2022, claimants must have been entitled, or later found to be entitled, to a payment, or an annual award of at least £26, of Tax Credits for any day in the period April 26, 2022 to May 25, 2022.
For joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
The first HMRC payments will total around £360 million and are part of a £37 billion package of support, which will see millions of low-income households receive at least £1,200 this year to help cover rising costs.
Commenting on the next phase of the financial support, Nadhim Zahawi, Chancellor of the Exchequer, said: “I know people are really concerned by rising prices so I’m glad that over a million more low earners will shortly receive their first Cost of Living Payment. We are also preparing options for further support so the new Prime Minister can hit the ground running.
“Alongside £400 off most people’s energy bills, tax cuts and the Household Support Fund, these direct payments are a very important part of our £37 billion package of help for households, which is targeted at those who need it most.”
Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said: “This first Cost of Living Payment will provide vital financial support for eligible tax credit-only claimants across the UK. A second payment will be made to eligible customers from the winter.
“The money will be paid automatically into bank accounts, so people don't need to do anything to get this extra help.”
Cost of living support
As well as the Cost of Living Payment, other UK Government support includes:
- £400 discount from the UK Government to help with the cost of energy bills from October onwards
- £150 Disability Cost of Living Payment from September 20 for those receiving an eligible UK disability benefit
- £300 Pensioner Cost of Living Payment that will be paid alongside Winter Fuel Payments
- 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
- A tax cut for around 30 million workers through a rise in National Insurance contribution thresholds
You can check that you are not missing out on any of the UK Government’s help for households on GOV.UK here.
To keep up to date with the cost of living crisis, join in the conversation on our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out three times each week - sign up here.
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