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.
Below is everything you need to know about the energy discount and benefit payments including eligibility for each one and when it will be paid - nobody needs to apply for any of them, they will all be paid automatically.
£400 discount off energy bills
The UK Government has doubled the £200 ‘loan-not-loan’ to £400 and turned it into a grant which means it doesn’t need to be repaid.
Energy suppliers 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 gets it: Households in Scotland, England and Wales - equivalent support will be delivered to people in Northern Ireland.
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.
£650 one-off payment for people on means-tested benefits
The ‘Cost of Living Payment’ of £650 will be made in two instalments for households on means-tested benefits this year.
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
The Department for Work and Pensions (DWP) will make the payment in two lump sums – the first from July and the second in the autumn.
Payments from HM Revenue and Customs (HMRC) for those on Tax Credits only will follow shortly after each to avoid duplicate payments.
Claimants will need to be in receipt of one of these benefits, or have started a claim which is later successful, as of May 25, 2022 to be eligible for the first of the two instalments.
HMRC and DWP will provide further guidance, and the UK Government will set out the eligibility date for the second instalment, in due course.
This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
Payments will be made directly to households across the UK.
£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.
Eligible benefits:
- Disability Living Allowance
- Personal Independence Payment
- Attendance Allowance
- Adult Disability Payment (Scotland only)
- Child Disability Payment (Scotland only)
- Armed Forces Independence Payment
- Constant Attendance Allowance
- War Pension Mobility Supplement
To be eligible, claimants must be in receipt of, or have started an eventually successful claim for, one of the benefits above as of May 25, 2022.
Disability benefit claimants who receive means-tested benefits, will get the £150 on top of the £650 they will receive separately.
These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
Payments will go directly to eligible people across the UK.
£300 one-off payment for people of State Pension age
The £300 ‘Pensioner Cost of Living Payment’ will go to pensioner households across the UK who receive the Winter Fuel Payment and 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 Winter Fuel Payment including the extra Pensioner Cost of Living Payment is not taxable and does not affect eligibility for other benefits.
All 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.
For most pensioner households, this will be paid by direct debit.
People will be eligible for this payment if they are over State Pension age (aged 66 or above) between 19-25 September 2022.
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.
£500m increase and extension of Household Support Fund
The Household Support Fund helps those in most need with payments towards the rising cost of food, energy, and water bills.
The Barnett formula provides a share of this funding to the devolved administrations in Scotland, Wales, and Northern Ireland so they can decide how to provide support.
The UK Government will issue additional guidance to Local Authorities in England to ensure support is targeted towards those most in need of support, including those not eligible for the Cost of Living Payments set out on May 26, 2022.
The Household Support Fund is administered by local councils in England and further information will be available directly from them.
Eligibility will be determined by individual councils.
You can read detailed examples of how the additional support packages will affect different types of households on he GOV.UK website here.
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