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Daily Record
Daily Record
Lifestyle
Linda Howard

Some people on ESA will not qualify for new £900 cost of living payment

The Department for Work and Pensions (DWP) recently announced the payment schedule for the next wave of cost of living support, worth up to £1,350 for those on a low-income, people claiming disability benefits and pensioner households. The DWP also confirmed that the new £900 cash support for over eight million eligible means-tested benefits claimants will be made in three instalments - two this year and one in 2024.

Claimants on qualifying benefits, including Universal Credit, Pension Credit and Tax Credits, will see the first payment for £301 land in their bank accounts automatically this spring. However, the DWP also recently confirmed the reason why people on Contribution-based Employment and Support Allowance (ESA) will not be eligible for any of the means-tested payments.

Minister for Social Mobility, Youth and Progression, Mims Davies MP, clarified that the new £900 cost of living payment is being targeted at low income households in receipt of a “means-tested income replacement benefit” - Contribution-based ESA is a non means-tested benefit.

The response came after Labour’s Dame Angela Eagle MP asked in a written query: “For what reason the Department has decided that those in receipt of Contribution-based Employment Support Allowance and who do not receive Universal Credit are not eligible for Cost of Living Support payments?”

In a written response, Ms Davies said: “The cost of living payment is being targeted at low income households who are in receipt of a means-tested income replacement benefit. Contribution-based Employment and Support Allowance is a non means tested benefit.

“Non-means tested benefits are not qualifying benefits for the cost of living payment in their own right because people receiving these benefits may have other financial resources available to them.”

The DWP minister went on to outline the additional UK Government support being paid to millions of households in 2023/24. “This payment comes on top of extensive [UK] Government support with the cost of living, including six million disabled people having been paid a separate £150 Disability Cost of Living Payment,” she explained.

Over eight million people of State Pension age will receive a £300 Pensioner Cost of Living Payment added to their annual Winter Fuel Payment. DWP has previously said that exact payment windows will be announced closer to the time, adding that payments are being spread out to ensure consistent support throughout the year.

Cost of living payment schedule 2023/24

Below is the payment schedule from DWP. People who are eligible for any of the Cost of Living Payments and receive Tax Credits, and no other means-tested benefits, will receive their payment from HM Revenue and Customs (HMRC) shortly after DWP payments are issued.

£900 means-tested cost of living payment

  • £301 - first payment to be made during Spring 2023
  • £300 – second payment to be made during Autumn 2023
  • £299 - third payment to be made during Spring 2024

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.

£150 disability cost of living payment

  • £150 - this one-off payment will be made during Summer 2023

This will be paid to eligible claimants receiving the following benefits:

  • Disability Living Allowance
  • Personal Independence Payment
  • Adult Disability Payment
  • Child Disability Payment
  • Attendance Allowance
  • Armed Forces Independence Payment
  • Constant Attendance Allowance
  • War Pension Mobility Supplement

This payment will be tax-free and will not have any impact on existing benefit awards.

£300 Pensioner Payment

  • £300 - this will be added to annual Winter Fuel Payments during Winter 2023/24

Older people also in receipt of Pension Credit will also qualify for the £900 means-tested cost of living payment and the £150 payment if they are receiving support through one of the listed disability benefits. In total, pensioner households could get an income boost of £1,350 during 2023/24.

To keep up to date with the latest cost of living news, join our Money Saving Scotland Facebook page here, or subscribe to our newsletter which goes out four times each week - sign up here.

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