A one-off payment of £650 is being made to the UK’s most vulnerable households this year to combat the UK’s cost of living crisis.
Rishi Sunak announced the grant in May as part of a range of measures which also included doubling the existing £200 energy rebate, and an extra £300 for pensioners who receive the winter fuel payment.
Here’s what the eligibility rules for the payment mean for people on Universal Credit, and when you can expect to receive the money.
Will I get the cost of living payment on Universal Credit?
Universal Credit claimants are among the groups eligible to receive the £650 cost of living payment.
According to the Government’s guidance, the one-off grant will be given to all households on means tested benefits, including those receiving the following:
- Universal credit
- Income-based jobseekers allowance
- Income-related employment and support allowance
- Income support
- Working tax credit
- Child tax credit
- Pension credit
It advises that claimants needed to be in receipt of one of these benefits, or must have begun a successful claim, as of Wednesday 25 May.
Means tested benefits are awarded based on your income and how much capital you have – if someone can demonstrate that their income and capital are below a certain level, they qualify.
The Government advises: “You will not get a payment if you have already received a Cost of Living Payment from HMRC because you were entitled to tax credits.”
Experts have warned that families who lose their jobs after cut-off dates for benefit eligibility may miss out on some or all support.
There is no tapering of the grants being distributed, which means the full amount will apply to those who claim the lowest amount in benefits.
Those who are just outside of the income bracket for Universal Credit will be entitled to none of the additional grants.
In an interview with the Chancellor after his announcement, Martin Lewis pointed out that people on certain benefits, such as contribution-based employment and support allowance and personal independence payments (PIP), would miss out.
There is also concern that the very poorest do often not know they can claim benefits, despite being eligible, making them difficult to target with additional, means-tested support.
When will the cost of living payment be made?
The Government announced that the payment will be issued directly to households on Universal Credit and other means-tested benefits in two lump sums, with one paid in July and another in autumn.
The first instalment of the £650 will automatically land in bank accounts from 14 July, continuing to the end of the month.
For those qualifying for the one-off payment through tax credit and working tax credit, the two instalments will be paid in autumn and winter instead.
The Government advises for joint benefits claimants: “If you have a joint claim with a partner, you will get one payment of £650 for both of you, paid in two lump sums from July 2022 and in autumn 2022, if eligible.”
If you eligible for the payment, there is no need for you to apply – the £650 will be submitted to you automatically.
It will be tax-free for all eligible groups, will not affect the benefit cap and will not affect existing benefit awards.
Mr Sunak said: “DWP will make the payment in two lump sums, the first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after.”
He added that the package would mean that almost all of the eight million most vulnerable UK households will receive at least £1,200 of support, including a £150 council tax rebate which has already been announced.