Definition
In May 2022, the chancellor announced to help UK residents with the rising cost of energy and food by offering them some money under the Cost of Living Allowance. Households entitled to the government’s cost of living payments started receiving money on the 14th of July this year.
The first tranche of £326, that goes into bank accounts is aimed at those claiming benefits and tax credits.
This article will share who qualifies for the Cost of Living Allowance, when it is paid and what you get.
What Payments Are Being Made?
There are three different payments under Cost of Living Allowance:
Payment #1
The main cost of living allowance is worth £650 in total. It is for those on income-related benefits and tax credits. The payments have already started in July.
Payment #2
The second cost of living payment is the pensioner payment. It is worth £300. It is for everyone who receives the winter fuel payment. The pensioner payments will come in November this year.
Payment #3
The last one is the disability payment. It is worth £150 and it is given to those with non-means-tested disability benefits. The disability cost of living payment is expected to be paid from September 2022.
How Will The Money Be Paid?
The main cost of living allowance for those on income-related benefits and tax credits is being paid in two instalments:
-The first instalment is £326
-The second instalment is worth £324
The money is being paid into the same account that your benefits are paid into, and will have a reference “DWP Cost of Living”. No one needs to apply for this cost of living allowance, it is paid automatically to everyone who qualifies.
Who Qualifies For The £650 Payment?
About 8.2 million households in the UK are eligible for the main Cost of Living Allowance. One needs to be receiving one of the following benefits to qualify for £650:
● Pension Credit
● Universal Credit
● Income-based Jobseeker’s Allowance (JSA)
● Income Support
● Income-related Employment And Support Allowance (ESA)
● Child Tax Credit
● Working Tax Credit
Anyone receiving new-style employment and support allowance, contributory employment and support allowance or new-style jobseeker’s allowance but not getting universal credit, will not qualify for this Cost of Living Allowance. Also, people receiving housing benefits, but none of the qualifying benefits, will not get the payment either.
Can You Get More Than One Of The Payments?
Yes, some individuals and households are qualified for more than one of the Cost of Living allowances. For instance, a pensioner who is claiming attendance allowance can receive the £300 pensioner payment on top of the £150 disability payment. Also, a pensioner claiming pension credit and attendance allowance can qualify for the £650 main Cost of Living Allowance.
What Else Will Households Get?
In the coming winter, there will be a £400 discount on electricity bills for all households. This discount will be arranged by energy providers and will not be paid back by customers.
Although some councils are still processing the rebate, A £150 rebate on council tax for band A-D properties has been paid to many households.
Is The Cost Of Living Allowance Enough?
Probably NOT!
In the best case scenario, a household who qualifies for the £650 main Cost of Living Allowance and the £150 council tax rebate alongside the £400 discount on energy bill will receive only £1,200 worth of help. And a pensioner who qualifies for all of the help available will receive just over £1,500. But this allowance is expected to hit £2,800, representing a year-on-year increase of about £1,500.
