HM Revenue and Customs (HMRC) has issued a warning to people on means-tested benefits expecting to receive the first part of the £900 cost of living payment next month. Over one million people claiming Tax Credits are set to receive a payment of £301 between Tuesday, May 2 and Tuesday, May 9, 2023.
However, following the announcement earlier this week, HMRC warned that receiving a previous cost of living payment does not mean you will be entitled to a future one. It added that claimants will need to meet the separate eligibility criteria for each payment.
The £900 means-tested payment will be made in three instalments - £301, £300 and £299 - and each separate lump sum will have its own unique qualifying period. To be eligible for the May payment of £301, people on Tax Credits, must have received a payment on any day between January 26, 2023 and February 25, 2023 - or later found to have been entitled to a payment for this period.
For joint claimants, where one person 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.
HMRC has said that nobody needs to apply for the payments. It said: “If customers are eligible through receiving Tax Credits only, HMRC will make the cost of living payment automatically into the bank account where claimants already receive their Tax Credits.”
However, it added that people might find that their payment is delayed if they have recently closed the bank account their Tax Credits are usually paid into.
If they have not told HMRC that their bank account has changed, the money will go into their old bank account, meaning the payment will be rejected. If this happens, HMRC will follow this up by letter, letting the claimant know that they need updated bank details.
If people on Tax Credits believe they are eligible but do not receive a payment between the published payment dates (May 2-9), they should wait until May 16, 2023 at the earliest to contact HMRC.
HMRC said this is to allow time for their bank, building society or credit union to process the payment. It said: “We will not be able to provide customers with any further information before this date.”
The Department for Work and Pensions (DWP) recently announced that eligible households receiving DWP means-tested benefits will receive the £301 cost of living payment between Tuesday April 25 and Wednesday, May 17. This includes Tax Credit claimants who also receive other income-related benefits from DWP.
Qualifying benefits for £301 payment
This will be paid to eligible households receiving the following benefits:
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Pension Credit
- Working Tax Credit - paid by HMRC if no other DWP means-tested benefit is also claimed
- Child Tax Credit - paid by HMRC if no other DWP means-tested benefit is also claimed
This payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.
Benefits that do not qualify for £301 payment
You will not get a payment if you are only getting:
- New Style ESA
- Contributory ESA
- New Style JSA
Joint claims
If you have a joint claim on the qualifying dates, a single payment of £301 will be sent using the same payment method, if you’re eligible.
Universal Credit ‘nil awards’
You will not be eligible for the £301 cost of living payment if your Universal Credit is reduced to £0 for the qualifying assessment period - often referred to as a ‘nil award’.
Reasons your Universal Credit may be reduced to £0 for an assessment period include getting more than one payment of earnings, your or your partner’s earnings go up, your or your partner’s savings go up, you start getting another benefit.
However, if money has been taken off for other reasons such as payments of rent to your landlord or for money that you owe, you might still be eligible.
New Pension Credit claims and £301 payment
The DWP is also encouraging low-income pensioners not already getting Pension Credit to check their eligibility, as they can still qualify for the £301 cost of living payment if they make a successful Pension Credit application by May 19, 2023.
This is because Pension Credit is a retrospective benefit that can be backdated by up to three months, taking it to within the qualifying period.
People can check their eligibility for Pension Credit using the online calculator on GOV.UK here or by calling the Pension Credit helpline on 0800 99 1234.
To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
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