Cost of living payments 2022: how do I get £400 energy grant and £650 payment - and how will they be paid?

With inflation at a 40-year high, the Chancellor Rishi Sunak has increased UK cost of living crisis support

Mr Sunak said the move had come as a result of a warning from Ofgem that the energy price cap will go even higher in autumn 2022 - but it was seen by some as a bid to move the news agenda away from the Sue Gray report into Partygate.

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Whatever the reason for the announcement’s timing, the UK is currently seeing its worst cost of living crisis for decades, with inflation at a 40-year high and wages decreasing.

Pensioners will receive £300 later in 2022, Rishi Sunak has announced (image: PA)

So, who will get Rishi Sunak’s new support, how will they receive it - and when will they get it?

What did Rishi Sunak announce?

After months of pressure for the government to do more to tackle the cost of living crisis, Rishi Sunak unveiled a £15 billion support package.

He said he had loosened the public purse strings because of the “acute distress” high inflation was causing people across the UK.

Mr Sunak told MPs: “I know they are worried, I know people are struggling,” and added: “[the government] will not sit idly by while there is a risk that some in our country might be set so far back they might never recover”.

The Chancellor also insisted rocketing inflation could be brought under control after Bank of England governor Andrew Bailey admitted feeling helpless in the face of it.

“It is not some abstract force outside our grasp. It may take time, but we have the tools we need and the resolve it will take to reduce inflation,” Mr Sunak said.

Rishi Sunak insisted he could get inflation back under control (image: PA)

Challenged on whether the timing of the announcement was designed to distract from Partygate, Mr Sunak later insisted to reporters that “the timing of today is because we now have more clarity [about energy bills]”.

Rishi Sunak said the cost of living support would be funded through a mix of new taxes and government borrowing.

Around £5 billion is expected to come from a windfall tax on some of the profits energy and fuel firms have posted - although Mr Sunak and Treasury officials referred to it as a levy.

Opposition parties have been calling for a similar tax for several months and claimed the Chancellor had been dragged “kicking and screaming” into a U-turn on the policy.

(Photo by BEN STANSALL/AFP via Getty Images)

Most of the funding for the spending - roughly £10 billion - is set to come from government borrowing.

Mr Sunak described it as “responsible fiscal policy”.

However, it marks a major turnaround from a Spring Statement that saw little public spending but major tax hikes and the government’s insistence that extra public spending would make inflation worse.

What cost of living support was announced?

The major announcement from Rishi Sunak was that a previously announced £200 energy bills loan due to be paid out in October would now become a one-off £400 energy bill discount.

This money will be paid out to every household in the UK in October, regardless of their wealth or earnings.

Treasury officials admitted it will be paid to some individuals multiple times if they pay bills at multiple properties, e.g. holiday homes.

Those who receive disability benefits are set to receive £150 in cost of living support (image: PA)

Rishi Sunak, who recently appeared in the Sunday Times Rich List alongside his wife Akshata Murthy, said he would be donating his £400 to charity.

Other policies announced by the government included:

  • A one-off targeted £650 payment to support low-income households - the Treasury said this would support more than eight million households who are paid benefits. The money will be paid in two instalments in July and in the autumn to those who are registered to receive certain benefits.
  • A £300 payment to pensioner households - this money will be paid out across November and December alongside the existing winter fuel allowance.
  • £150 for people on disability benefits - it is set to be paid by September with their usual benefits payment.

A further £500 million would be given to councils in England as part of the existing household support fund, and would have its time limit extended to March 2023.

This fund is used by local authorities to distribute money or key items to the poorest and most vulnerable people in their area.

Overall, it means the poorest eight million households will receive at least £1,200 in additional government support in 2022, the Treasury says.

Will government cost of living support be available UK-wide?

Most of the announcements made by Rishi Sunak will be rolled out across England, Scotland and Wales.

However, the household support fund will be England-only, with funding, as calculated by the Barnett formula, distributed to the devolved nations.

The government says it will match the energy bills support for the people of Northern Ireland.

However, there is a big question mark over how and when this funding will be distributed in the country given the Stormont Executive remains suspended.

The power-sharing agreement in Belfast broke down after nationalist party Sinn Fein became the largest party in May’s elections, overtaking unionist grouping the DUP.

The DUP has said it will refuse to cooperate until its concerns over the Brexit protocol - which Sinn Fein supports - are addressed.

Sinn Fein’s Finance Minister in Stormont Conor Murphy said: “The additional £14 million funding we will receive from the Household Support Fund cannot be allocated in the absence of an Executive.

“This now means there is a total of £435 million which cannot be allocated to help families, workers and businesses with the cost of living and to support public services, particularly our health service.”

DUP MLA Jonathan Buckley said his party wanted “to see devolved government operational” but insisted it “must be on a sustainable, long-term footing” to do so.

Additional reporting by PA