Cost of living payments: who is eligible for new £900, £300 and £150 support - when will money be paid?

Chancellor Jeremy Hunt has set out new cost of living support payments

Jeremy Hunt has outlined a new cost of living support package to help households cope with soaring prices.

In his autumn statement, the Chancellor set out a package containing “difficult decisions” that amounts to a “substantial tax increase”, but stressed he would put the UK on a “path to stability”.

The package represents a significant change from his predecessor Kwasi Kwarteng’s unfunded tax cuts in his disastrous mini-budget less than two months ago which was blamed for crashing the markets.

Hunt said his plan to address the cost of living crisis “delivers lower inflation, lower mortgage rates, a shallower downturn, and lower unemployment, but it also involves public spending discipline”.

He confirmed that the government’s Energy Price Guarantee will continue for a further 12 months from April at a higher level of £3,000 per year for the average household, which will mean an average of £500 support for every home in the country.

But the most vulnerable households are set to receive additional help in the form of new cost of living payments next year, including a £900 boost for households on means-tested benefits. A £300 cost of living payment will also be issued to pensioner households, plus a £150 payment for people on disability benefit.

Here’s what you need to know about the new payments, who is eligible and when they will be paid.

Chancellor Jeremy Hunt has set out new cost of living support payments (Photo: Adobe)

Who will get the £900 cost of living payment?

Claimants of the following DWP benefit payments will be eligible to receive the new £900 cost of living payment:

  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Universal Credit
  • Working Tax Credit
  • Child Tax Credit

The exact date payments will be issued next year is yet to be confirmed but the DWP and HMRC said they will provide further details on payment dates “in due course".

It has also been announced that the payment will be sent in instalments again, as with previous cost of living support. The payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

Who will get the £300 cost of living payment?

A new £300 cost of living payment will be issued to more than eight million pensioner households across the UK in 2023-24 to help with rising bills.

Again, the DWP has said it will provide further details on payment dates and eligibility criteria “in due course”. This payment will also be tax-free and will not impact existing benefit awards.

Who will get the £150 cost of living payment?

More than six million people on disability benefits will receive an extra £150 cost of living payment in 2023-23. This includes people who currently receive:

  • Attendance Allowance
  • Constant Attendance Allowance
  • Disability Living Allowance for adults
  • Disability Living Allowance for children
  • Personal Independence Payment
  • Adult Disability Payment (in Scotland)
  • Child Disability Payment (in Scotland)
  • Armed Forces Independence Payment
  • War Pension Mobility Supplement

As with the other payments, the DWP is yet to reveal the dates for when people need to be claiming these benefits to be eligible to receive the cost of living support.

Confirming the new payments, Hunt told MPs: “For the most vulnerable we will introduce additional cost-of-living payments next year, of £900 to households on means-tested benefits; £300 to pensioner households; and £150 for individuals on disability benefit.

“We will also provide an additional £1 billion of funding to enable a further 12-month extension to the Household Support Fund, helping local authorities to assist those who might otherwise fall through the cracks.

“And for those households who use alternative fuels such as heating oil and LPG to heat their homes, I am today doubling the amount of support from £100 to £200, which will be delivered as soon as possible this winter.”