Millions of people claiming means-tested benefits will start to receive a cost of living payment from the government this month to help with rising costs.
A one-off £650 payment is being made to millions of low-income households as part of a £15 billion emergency package of support announced by former Chancellor Rishi Sunak.
Mr Sunak said earlier this year that the government “will not sit idly by” while people are struggling as he unveiled the package aimed at reducing the impact of soaring inflation, which has hit a 40-year high.
Eligible households will start to see the first instalment of the one-off payment arrive in their bank accounts from today (14 July).
Who is eligible for the £650 payment?
More than eight million households are set to receive the one-off cash payment.
If you receive benefits based on your income, you will be eligible for the one-off payment regardless of how much benefit you get.
These types of benefits are means-tested, meaning people qualify to receive them based on their financial situation. To qualify, you need to demonstrate that your income, savings and capital are below a certain level.
The £650 payment will apply to the claimants of the following benefits:
- Universal Credit
- Working Tax Credit
- Child Tax Credit
- Pension Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
The Department for Work and Pensions will make the payment in two lump sums directly into claimants bank accounts.
The first £326 instalment will be paid to all eligible households from 14 July, with the second instalment of £324 to follow in autumn.
Payments from HMRC for those on tax credits only will follow shortly afterwards.
The DWP has warned that there may be a delay to the first payment due to the volume of people in line to receive it, saying “may be potential delays for a small minority of cases due to their unique characteristics”.
Work and Pensions minister David Rutley said: “Due to the volume of people entitled to the payment, it is not possible to issue all of the Cost of Living Support Payments at the same time.
“Issuing payments will be staggered, but not by benefit type, starting on July 14, 2022.”
He added: “We currently expect the majority of payments to be made by the end of July, there may be potential delays for a small minority of cases due to their unique characteristics.”
It means the vast majority of the eight million people eligible should receive the first part of the £650 cost of living payment between 14 and 31 July.
The second payment of £324 will then follow in the autumn, although an exact date for the final instalment is yet to be confirmed.
Who is not eligible to receive the £650 payment?
Eligibility for the £650 payment depends on what type of benefits you get, meaning some claimants may miss out.
If your benefits are not means-tested you will not be eligible to receive the cash. This includes people who claim the following benefits:
- Attendance Allowance
- Carer’s Allowance
- Child Benefit
- Disability Living Allowance (DLA)
- ‘New style’ Employment and Support Allowance
- Guardian’s Allowance
- ‘New style’ Jobseeker’s Allowance
- Maternity Allowance
- Personal Independence Payment (PIP)
- State pension
- Statutory sick pay
- Statutory adoption, maternity, paternity and shared parental pay
What other support will there be?
Those who will miss out on the £650 will still benefit from some of the other payments being rolled out by the government.
All UK households will receive a £400 grant in October to ease the cost of spiralling energy bills, which will be partly funded by a £5 billion windfall tax on oil and gas giants.
Mr Sunak said the universal support is being doubled from £200 to £400, and the requirement to pay it back will be scrapped. This means households will receive a £400 discount on their energy bills from October.
A £300 cost of living payment will be given to more than eight million pensioner households in November and December, alongside the Winter Fuel Payment. The payment will be made directly to households in the same way they receive the winter fuel allowance.
Six million people on disability allowance will also receive a one off payment of £150 in September.