The Department for Work and Pensions (DWP) has rejected a call from Labour MP, Charlotte Nichols, to widen the eligibility scope for the one-off £650 Cost of Living Payment to include people on contribution-based Employment Support Allowance and other non-means tested benefits.
Last month, Chancellor Rishi Sunak announced a £15 billion package of further financial support for millions of households across the UK struggling to make their incomes stretch to cover the rising cost of living.
This package is in addition to the £22 billion announced previously, with UK Government support now totalling over £37 billion which means that millions of the most vulnerable households will get £1,200 of one-off support in total this year along with a £400 discount on their electricity bill - and it doesn’t need to be paid back.
The ‘Cost of Living Payment’ of £650 will be made in two instalments - of £325 - for households on means-tested benefits only.
These benefits will receive the payments:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
In a written response to Ms Nichols’ question on June 13, DWP Minister David Rutley MP, said: “The [UK] Government is committed to managing the public finances in a responsible way by targeting the £650 Cost of Living Payment support at low income means-tested households where it is most needed.”
He went on to explain that the new Cost of Living Payments are in addition to the £400 of support for energy bills that the UK Government is providing through the expansion of the Energy Bills Support Scheme, doubling the £200 of support announced earlier this year and making the whole £400 a non-repayable grant.
He continued: “In addition, individuals may be able to benefit from the disability and pensioner Cost of Living Payments if they are in receipt of disability benefits or eligible for Winter Fuel Payments.”
He also highlighted that in addition to the new support, people on low incomes, but not means-tested benefits, may also benefit from previously announced measures to help households tackle the rising cost of living, including raising the National Insurance Contributions threshold from July 6, £150 Council Tax rebates and the increase of the National Living Wage to £9.50 an hour from April 2022.
The first half of the £650 Cost of Living Payment will be issued in July.
You can read the full written response on the GOV.UK website, here.
Below are key dates and qualifying criteria for the three different one-off payments and £400 energy discount for domestic users - nobody needs to apply for any of the new support, they will all be paid automatically.
July and autumn
£650 one-off payment for people on means-tested benefits, as outlined above.
How to qualify for the payment:
- To be eligible for the first of the two instalments claimants will need to be in receipt of one of the benefits listed above, or have started a claim which is later successful, as of Wednesday May 25, 2022
Other key points about the payment:
- This payment will be tax-free
- It will not count towards the benefit cap
- It will not have any impact on existing benefit awards
How will payments be made:
- Directly to households across the UK
September
£150 one-off payment for people on disability benefits
The £150 ‘Disability Cost of Living Payment’ will be paid to people on disability benefits in September.
People on these benefits will receive the payment:
- Disability Living Allowance (DLA)
- Personal Independence Payment (PIP)
- Attendance Allowance
- Adult Disability Payment (Scotland only)
- Child Disability Payment (Scotland only)
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
How to qualify for the payment:
- To be eligible for the £150 one-off payment, claimants must be in receipt of the benefits listed above, or have started an eventually successful claim for one of these benefits as of May 25, 2022
Other key points about the payment:
- Disability benefit claimants who also receive means-tested benefits, will get the £150 on top of the £650, but they will be paid separately
- Payments will be exempt from tax
- They will not count towards the benefit cap
- Payments will not have any impact on existing benefit awards
How will payments be made:
- Payments will go directly to eligible people across the UK
October
£400 discount off energy bills
The UK Government will pay the £400 directly to energy suppliers who will deliver this support to households with a domestic electricity meter over six months from October.
Direct debit and credit customers will have the money credited to their account, while customers with pre-payment meters will have the money applied to their meter or paid via a voucher - this will depend on whether they have a smart meter or not.
Who qualifies for the £400 energy bill grant:
- Domestic energy users in Scotland, England and Wales - equivalent support will be delivered to people in Northern Ireland
Other key points about the payment:
- The £400 does not need to be repaid
- This support is on top of the £150 Council Tax rebate for households in bands A-D (and with a reduction in Scotland), which was announced in February, and which millions of households have already received
How will payment be made:
- Directly to energy suppliers - you do not need to apply for it
November/December
£300 one-off payment for people of State Pension age
All eligible pensioner households will get the one-off ‘Pensioner Cost of Living Payment’ as a top-up to their annual Winter Fuel Payment in November/December.
Who qualifies for the £300 ‘Pensioner Cost of Living Payment’:
- People will be eligible for this payment if they are over State Pension age (aged 66 or above) between 19-25 September 2022 and in receipt of the Winter Fuel Payment
Other key points about the payment:
- The £300 will be paid on top of any other one-off support a pensioner household is entitled to, for example where they are on Pension Credit or receive disability benefits
- The payment is not taxable
- The payment does not affect eligibility for other benefits
Who does not qualify?
- There are certain circumstances where an individual above State Pension age does not qualify for the Winter Fuel Payment which can be found on GOV.UK, here
How will payments be made:
- Directly to households across the UK
You can read detailed examples of how the additional support packages will affect different types of households on he GOV.UK website here.
Where to get help and advice
If you are unsure if you qualify for a one-off payment, or have a mixed household, seek professional advice from a non-profit organisation such as Citizens Advice, Advice Direct Scotland, Christians Against Poverty, Turn2Us and StepChange.
To keep up to date with the cost of living crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
