HM Revenue and Customs (HMRC) started issuing the first part of the £650 means-tested cost of living payment to more than one million people on Tax Credits on Friday, September 2 and expects most of the lump sums to have been made by Wednesday, September 7. The payments of £326 are being made automatically to eligible Tax Credits-only customers, so there’s no need to apply for the extra financial support.
It's important to understand this is for people who only receive Working Tax Credits or Child tax Credits. If you receive those benefits and also one of the qualifying means-tested benefits from the Department for Work and Pensions (DWP), you should have already received the first payment for £326 after July 14 - the second payment for £324 will be paid in the autumn, but no date has been announced yet.
As the payment window starts to close, Tax Credits claimants who have not received the payment yet, should not panic. HMRC has issued new advice to people who believe they are eligible for the payment, but do not receive it by September 7.
If you meet the qualifying criteria but the money does not land in your account, HMRC says that you should wait until Friday, September 16 before contacting them in order to allow time for your bank, building society or credit union to process the payment.
HMRC said: “We won’t be able to provide customers with any further information before this date.”
The department previously warned that there may be a delay in payments for some people who have recently closed the bank account their Tax Credits are usually paid into and have not informed HMRC of the change - the money may be paid into the old bank account, meaning the payment will be rejected.
If this has been the case, HMRC will follow up by letter to let the claimant know that they need to contact them with their updated bank details.
It’s worth noting that this round of payments are only for people claiming Working Tax Credits or Child Tax Credits.
Tax Credit claimants who also receive means-tested benefits from the Department for Work and Pensions (DWP) should have already received their first cost of living payment for £326 from July 14, 2022.
Eligibility for £326 Tax Credits-only cost of living payment
To qualify for the Tax Credits-only £326 Cost of Living Payment due to land in bank accounts by September 7, claimants must have been entitled, or later found to be entitled, to a payment, or an annual award of at least £26, of Tax Credits for any day in the period April 26, 2022 to May 25, 2022.
For joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
The first HMRC payments will total around £360 million and are part of a £37 billion package of support, which will see millions of low-income households receive at least £1,200 this year to help cover rising costs.
If you also receive a qualifying means-tested benefit from the DWP, you should have received this payment for £326 in July.
Cost of living support
As well as the Cost of Living Payment, other UK Government support includes:
- £400 discount from the UK Government to help with the cost of energy bills from October onwards
- £150 Disability Cost of Living Payment from September 20 for those receiving an eligible UK disability benefit
- £300 Pensioner Cost of Living Payment that will be paid alongside Winter Fuel Payments
- Changes to the Universal Credit taper rate and work allowances worth £1,000 a year on average for 1.7 million working claimants
- A rise in the National Living Wage to £9.50 an hour
- A tax cut for around 30 million workers through a rise in National Insurance contribution thresholds
You can check that you are not missing out on any of the UK Government’s help for households on GOV.UK here.
To keep up to date with the cost of living crisis, join in the conversation on our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out three times each week - sign up here.
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