Your guide to the Cost of Living payments

Household bills are rising rapidly, but the UK Government has made some financial help available through Cost of Living Payments to ease the stress. (Image credit: Adobe)

With bills rising, inflation at its highest in more than 40 years and life looking tough for the foreseeable future, the UK Government’s Cost of Living Payment is a financial rescue package that many households need. But what is available, are you eligible and how do you get them?

What help is available? 

The Government has made several financial payments available to UK households to ease the cost of living crisis being experienced by many people. Here is a guide to what has been announced so far.

If you are on a low income and in receipt of certain benefits, you may be entitled to financial assistance from the Government in the form of a Cost of Living Payment. 

The sum of £650 is split into two payments of £326 and £324; the first being paid to eligible people between 14 and 31 July 2022. The second will be paid no later than 31 October 2022, according to the latest reports. 

Am I eligible? 

To be eligible for the payments, you need to receive one of the following benefits on the qualifying dates. For the first payment, the qualifying date was set as 25 May 2022. The Government hasn’t released the qualifying date for the second payment yet, but if you are claiming one of the eligible benefits on that date, you will receive the second payment. 

• Universal Credit
• Income-based Jobseeker’s Allowance (JSA)
• Income-related Employment and Support Allowance (ESA)
• Income Support
• Pension Credit
• Child Tax Credit
• Working Tax Credit

The payments are separate from your benefit but will appear automatically in the same bank account. Designed to help ease the financial strain, payments are tax-free and don’t need to be repaid.

Pensioners are due to receive £300 Cost of Living Payments on top of their normal Winter Fuel Payment. (Image credit: Adobe)

For the past few years, pensioners can receive help paying their winter heating bills; however, for the winter of 2022, you can get a one-off payment. The Pensioner Cost of Living Payment is an automatic top-up of £300 for the Winter Fuel Payment, taking the total amount to a potential £600. 

Am I eligible?

You will automatically be awarded the Winter Fuel Payment and the extra top-up if: 

• You were born on or before 25 September 1956 

and

• You lived in the UK for at least one day during the week of 19 to 25 September 2022 – the qualifying week for the 2022 to 2023 period.

Most payments will be paid in November or December 2022, and you’ll receive a letter telling you when they will appear in your bank account.

The Government have made a one-off lump sum of £150 available to people who fulfil the eligibility criteria. The payments are tax-free, and you don’t have to pay them back.

Am I eligible?

To be eligible, you must have been in receipt of a qualifying benefit on 25 May 2022. These benefits are: 

• Attendance Allowance
• Constant Attendance Allowance
• Disability Living Allowance for adults
• Disability Living Allowance for children
• Personal Independence Payment
• Adult Disability Payment (in Scotland)
• Child Disability Payment (in Scotland)
• Armed Forces Independence Payment
• War Pension Mobility Supplement

Those eligible will automatically receive their payments from 20 September 2022 into the same account their benefits are paid.

Over 80% of eligible households have already received the £150 council tax rebate, with the Government setting aside £3 billion to help residents of properties in council tax bands A to D. These rebates, which were announced in April 2022, are tax-free and don’t have to be repaid. 

If you pay your council tax by direct debit, your local council has already put, or will be putting, the £150 rebate straight into your bank account. Those who don’t pay by direct debit should be contacted and invited to apply. However, we urge anyone who hasn’t received their rebate to visit their local council’s website for more information and to apply before the end of September, when applications close. 

Am I eligible?

To be eligible for the £150 council tax rebate, the person claiming needed to meet these criteria on 1 April 2022:

• Their home is in council tax bands A–D. This includes properties that are valued in band E but have an alternative valuation band of D as a result of a disabled band reduction
• Their property is their sole, or primary, residence.

There is also a discretionary council tax rebate for properties in band E–H available from some local councils – Dover, for example. To qualify for this, the applicant needs to be either: 

• In receipt of Universal Credit, Housing Benefit, Income Support, Council Tax Reduction, Income-Based Jobseeker’s Allowance, Income-Related Employment and Support Allowance, Working Tax Credit or Pension Credit

or

• Is not on those benefits but has a net weekly income of less than £257.69 for a single person or £384.62 for a couple and has savings of no more than £6,000 

and

• Was resident in the property they are applying for on 1 April 2022.

Contact your local council to check if you are eligible for the discretionary council tax rebate

Households across the UK will receive discounts on their energy bills this winter to help with the rising cost of living. (Image credit: Adobe)

As part of the Government’s Help for Households campaign, the £400 energy bill discount will be made in six instalments starting from October 2022. The Energy Bills Support Scheme will provide non-repayable financial aid to 29 million households across Great Britain. 

Chancellor of the Exchequer, Nadhim Zahawi, said:

“This £400 off energy bills is part of our £37 billion of help for households, including 8 million of the most vulnerable households receiving £1,200 of direct support to help with the cost of living.”

Am I eligible?

All properties in England, Scotland and Wales with a domestic energy supply are eligible, and the payment will be automatically included in your electricity bill. October and November discounts will be set at £66 for each month, with the figure rising to £67 monthly from December through to March 2023. 

Direct debit customers will see the amount deducted from their bills, while standard credit or prepayment customers will have the discount automatically applied as a credit.

The Government said it is working to ensure households in Northern Ireland receive equivalent support.

You may be entitled to a one-off discount on your electricity bill under the Warm Homes Discount scheme. Taken directly from your electricity bill, or gas if your supplier provides both, it’s worth up to £140. Prepayment customers will receive a voucher. 

Am I eligible?

There are two ways you can qualify for the Warm Home Discount:

• You receive the Guarantee Credit element of Pension Credit. This is the scheme’s core group
• You’re on a low income and meet your energy supplier’s criteria for the scheme, known as the broader group.

You can’t have missed the news that the Conservative Party and the country have a new Prime Minister. Liz Truss immediately announced plans to help people with their energy bills. 

Replacing the energy cap with her new Energy Price Guarantee, Truss is freezing energy bills for households at an average of £2,500 annually, beginning on 1 October 2022. On 17 October, new Chancellor Jeremy Hunt revised that plan to say the cap will only remain in place until April 2023, with a new plan beyond that point to be announced at a later date. It’s important to note that this figure is an average, and if your family uses a lot of electricity, your bills could be higher, and vice versa. The energy price cap of 52p per kWh still stands, but the government will pay energy suppliers the difference between the wholesale energy price and the price customers pay.

Further steps designed to address the energy crisis were also announced by Truss. These include:

• The existing energy bill discount of £400 will now be given to all households (Northern Ireland will roll out a similar scheme)
• Green levies are to be scrapped
• The £650 payments to those on eligible benefits will continue 
• The £150 to those with disabilities and £300 to pensioners will continue
• Lessening the country’s reliance on Russian oil, the government plans to boost North Sea oil production
• There will be a new scheme with the Bank of England to help struggling energy suppliers in the UK
• The UK’s Net Zero 2050 target will be reviewed to ensure it’s being addressed in a way that’s “economically efficient”