As the cost of living crisis deepens, millions of households are struggling to cover the spiralling cost of living. The UK government has responded by announcing a financial package designed to assist those who need help the most.
Part of the package unveiled by Chancellor Rishi Sunak is a £650 Cost of Living Payment, which will be available in two instalments. This one-off payment, split into two amounts, will help over eight million low-income households who receive Universal Credit, income support and other means-tested benefits.
The £650 Cost of Living Payment will be paid automatically into bank accounts this year.
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Do you qualify for £650 one-off Cost of Living Payment?
This one-off payment is available for those on means-tested benefits. If you currently claim one of the below, you are eligible for the £650 Cost of Living Payment.
- Universal Credit
- Income-based Jobseekers Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Pension Credit
When can you get the Cost of Living Payment?
The Department of Work and Pensions (DWP) will split the £650 Cost of Living Payment into two payments. The first of these two lump sums will be made from July. The second lump sum will be made in the autumn.
Payments from 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 the benefits mentioned above, or have begun 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 government will set out the eligibility date for the second instalment, in due course.
Will you have to pay tax on the £650 Cost of Living Payment?
No, you won't have to pay tax on it. The Cost of Living Payment is tax-free, will not count towards the benefit cap and will not impact any existing benefit awards.
The government will be introducing legislation to facilitate payments to be made to this timetable. The government will be issuing more information in the coming weeks when further details become available.
