Who Will Get the Government’s £650 Cost of Living Payments?

With the cost of living rising so rapidly in recent months, campaigners - including various debt help charities - have been calling on the UK government to provide direct financial support to hard-up and indebted households.

In response to those calls and the weight of pressure being put on household budgets by rising prices, the chancellor Rishi Sunak recently announced plans for a windfall tax on energy companies to raise money for direct cost of living support.

Plans are now in place for roughly 8 million of the least well-off people across the UK to receive direct payments worth £650 over the course of the next few months.

So, who is eligible to receive those payments?

Well, the essential idea behind the government’s plan is that the full £650 payouts should be given to everyone who currently claims a means tested benefit, which includes each of the following:

-          Universal credit

-          Income support

-          Pension credit

-          Working tax credit

-          Income-based Jobseekers Allowance

-          Income-related employment and support allowance

-          Child tax credit

The intention is for anyone in receipt of any of those benefits as of May 25th 2022 to receive £650 in two lump sums directly into their bank accounts, firstly in July and then at some point in the autumn.

Crucially, the payments are tax free and will not impact the benefit cap or any of the existing benefit payment situations that recipients have in place or are applying for.

Extra help with energy bills

In addition to the £650 being paid to low-income households across the country, the chancellor has now earmarked funds designed to help ease some of the pressure on households struggling to pay their energy bills.

Earlier this year, Rishi Sunak said the government would fund energy bill discounts worth £200 to each household because gas and electricity bills were rising so quickly.

However, the money involved there would effectively have been loaned so people would potentially still have seen their debt situations getting worse as their energy bills increased.

More recently, the chancellor has confirmed plans to provide for £400 discounts on energy bills that function as grants to all households rather than loans that need to be paid back.

It is also the government’s plan to provide additional £300 payments to pensioners who are entitled to Winter Fuel Payments from November this year.

If you live anywhere in Scotland and you are worried about your personal debt situation then Scotland Debt Solutions can help. Contact us directly to arrange a FREE and confidential consultation.