Households can expect to receive the £650 cost of living payment within weeks, with the majority of benefit recipients eligible for the extra money.
Chancellor Rishi Sunak announced last month that the government would provide a £400 grant to households as well as a one-time additional payment of £650 to those on the lowest incomes. More than eight million UK claimants of Universal Credit, tax credits, pension credit and inherited benefits will receive two payments of £325 each, the first arriving in July for most households and the second in fall.
The government has said you will need to have been entitled to one of these eligible benefits on May 25, 2022 to get the first payment. Separate one-off payments of £300 will also be made to pensioner households and £150 to people receiving disability benefits.
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This comes as nearly six in 10 households (57%) have had to make adjustments to cover the cost of basic necessities in the past month, according to Which? Measures have included cutting essential expenses, borrowing from family and friends, taking out loans or credit cards, dipping into savings or overdrafts, or selling items.
This is a significant increase from the 38% who had to make adjustments in May 2021. About two million households missed a housing, bill, credit card or loan payment during the month last, which one? valued.
He said lower-income households in his survey were more likely to have missed a payment. Many people said they are living their lives differently amid the price hikes.
In response to rising energy costs, a third (32%) said they used less hot water and one in six (16%) said they ate less ready meals. More than one in 10 (11%) said they had skipped meals due to rising food prices, 8% had prioritized meals for other family members and 3% had used a food bank.
The cash payment of cost-of-living support will be granted to 8.4 million households who receive means-tested benefits. These are benefits where your income and savings are taken into account to determine the amount you receive.
A government spokesperson said: “You will receive one payment from July 2022 and a second payment in the fall of 2022, if you qualify. You must have qualified for one of these qualifying benefits on the 25th May 2022 to get the first payment.
“We will update these guidelines when the government announces the date you must have qualified for one of these qualifying benefits to get the second payment.
“If you have a joint claim with a partner, you will receive a payment of £650 for the two of you, paid in 2 lump sum payments from July 2022 and in autumn 2022, if eligible. You will not receive a payment if you are eligible for a cost of living payment from HMRC because you are entitled to tax credits.”
However, not everyone receiving benefits will be entitled to cost-of-living payments. Excluded are recipients of New Style Employment and Support Allowance and New Style Jobseeker’s Allowance.
But if recipients also receive Universal Credit or a Disability Benefit, they will still be eligible for payments. In fact, those receiving a disability benefit may also be eligible for additional disability cost of living payments.
When will the payment of £650 arrive in my bank account?
The £650 is split into two payments, with the first cash sum of £325 arriving for most eligible households from July. The second payment of £325 is then expected to hit bank accounts in the autumn, although there is no set date, The mirror reports.
Those claiming tax credits will get their first payment a little later, with the first £325 not expected to be processed until the autumn. The second payment of £325 will then be sent in winter, but again there is no date set yet.
You must have been entitled to one of the eligible benefits on May 25, 2022 to obtain the first payment. However, the deadline for who is eligible for the second payment has not yet been set.
This means that thousands of Britons who qualify for one of these benefits could potentially start a claim and be eligible for the second payment.
What benefits do I need to claim to get the £650?
The £650 payment is only given to those claiming means-tested benefits. This includes:
Should I ask for the £650?
Payment is issued automatically to eligible households. These payments are not taxable and will not affect any benefits or tax credits you obtain.
I am not applying for these benefits – what help can I get?
Two other one-time payments are made to vulnerable households. This includes £150 for those claiming certain disability benefits and £300 for pensioners receiving winter fuel payments.
Every household in England, Scotland and Wales will also receive £400 off their energy bills, spread over six months from October. This replaces the £200 ‘loan not ready’ originally announced by the Chancellor last year.
Critics said this support does not go far enough to help those worst affected by the cost of living crisis, as the £200 had to be repaid at a rate of £40 a year from 2023. This program will not happen now, as it has been replaced by the £400 rebate on your energy bills, with that money no longer needing to be paid back.
The Household Support Fund has also been extended again by another £500million. Part of the help offered through the Household Support Fund includes money for your bills and supermarket vouchers.
However, support varies between councils – as well as eligibility criteria. This means that each local authority decides who to give the money to and how the money is to be spent – so you could face a postcode lottery in terms of the help available to you.