The cost of living payment is a one-off payment of £650 announced as part of former Chancellor Rishi Sunak’s plan to tackle the rising cost of living crisis. The payment was made available to recipients of means-tested government benefits such as child or employment tax credit, earnings-tested unemployment assistance (JSA), earnings-tested Employment and Assistance Allowance (ESA), income support, retirement credit, and universal credit. The £650 cash was split into two separate payments of £326 and £324 to fight fraud, with the first payment coming in early July this year.
However, those receiving tax credits or child tax credits will receive their first installment later in September as their benefit is paid by HM Revenue and Customs and not the Department for Works and Pensions (DWP).
According to HMRC, one million people claiming tax credits received that payment, totaling around £360million.
DWP announced the second payment of £324 is due to be paid out between November 8th and 23rd.
Previously, DWP said tax credit applicants would receive the second installment later in the winter.
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However, it has now been confirmed that these beneficiaries will receive the second installment “shortly after the low-income DWP benefits have been paid out”.
This indicates that the second installment will be paid sometime after Wednesday 23rd November.
Individuals are eligible for the second cost of living payment if they received tax credits for any day between August 26, 2022 and September 25, 2022 or later.
This can either be a tax credit payment for tax year 2022 to 2023 or an annual tax credit award of at least £26 for tax years 2022 to 2023.
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If eligible, the money is automatically transferred to bank accounts, so people don’t have to do anything to get that extra help.
HMRC confirmed that a person receiving both a child tax credit and an employed tax credit will only receive one child tax credit living cost payment.
The Government also confirmed that a person receiving tax credits from HMRC and a low-income benefit from the DWP will only receive a living expenses payment from the DWP.
If someone had a joint claim between the eligible dates, a one-off payment of £324 will be sent using the same payment method used between those dates, provided they are eligible.
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The DWP has said more complex claims or those awaiting an award decision may have to wait a little longer for their cases to be resolved.
This warning applies to those who receive their qualifying benefit at a later date or have changed the account into which their benefit or tax credit is paid.
The government agencies said they use a computer program to identify those who are eligible for living expenses.
If someone believes they have missed their payment but is entitled to the money, they are advised to apply for it from the agency that pays their benefits.
The £650 cost of living payment is part of the government’s £37bn package, which aims to give over eight million households an extra £1,200 to help them deal with the financial crisis.
Other programs making up the cost-of-living package included a £150 payment to people with disabilities, a £150 council tax rebate for every household in the UK and a £400 reduction in energy bills for all households between October and March next year.
In addition, as part of its Energy Price Guarantee, the Liz Truss Government has capped the average household energy bill at £2,500 per year
However, this is not an absolute limit and households can pay more depending on their energy consumption.