universal credit cost of living paymentuniversal credit cost of living payment

As the universal credit cost of living crisis continues, millions across the UK find themselves grappling with financial burdens.

A recent study by the Financial Conduct Authority reveals a staggering count of 10 million individuals struggling financially, highlighting a yearly increase of 3.1 million. The report raises alarm as numerous individuals are forced to make tough decisions between affording heating or food, and even canceling insurance policies to cover necessary expenses.

The relentless surge of inflation, standing at a formidable 10.1 per cent, keeps the cost of consumer goods at high levels in both supermarkets and high street stores. A recent survey by Which? indicates prices have doubled in many instances. As a result, households continue to be strained, particularly after a lengthy winter season accompanied by soaring energy bills.

While the state provides support to those with low incomes, multiple government programs designed to assist throughout the colder months, including the Warm Home Discount and Cold Weather Payment schemes, have now concluded, winding down on April 1st with the shift of the seasons.

Additionally, the government’s Energy Bill Support Scheme, initiated by Rishi Sunak during his tenure at 11 Downing Street last year, has also reached its end. This scheme distributed its last payment of £67 in late March, culminating in a total payout of £400.

Below, we look at what support is available to households this June.

Extra £1,350 of support being paid out

Although the Energy Bill Support Scheme has concluded, the government will still be extending further financial assistance to millions of low-income households this year, with potential aid amounting up to £1,350.

The Department for Work and Pensions (DWP) announced that eight million individuals eligible for means-tested benefits – including those on universal credit, pension credit, and tax credits – are set to receive £900. These funds will be distributed in three instalments beginning this spring, with the money being directly deposited into recipients’ bank accounts.

In addition to this, over six million people with disabilities are set to receive an independent payment of £150. Moreover, a supplementary £300 will be given to more than eight million pensioners.

Here is a summary of the payment schedules that have been revealed thus far, with more exact dates anticipated later:

  • £301 – The initial cost of living payment has already been dispensed between 25 April and 17 May (or 2 to 9 May for those receiving tax credits but no other low-income benefits).
  • £150 – The disability payment is expected to be issued in the summer of 2023.
  • £300 – The subsequent cost of living payment is planned for the autumn of 2023.
  • £300 – The payment for pensioners is slated for the winter of 2023/4.
  • £299 – The third cost of living payment is scheduled for the spring of 2024.

Energy Price Guarantee still in play

In the Budget delivered on March 15, Chancellor Jeremy Hunt brought forth some encouraging news. The announcement detailed an extension of the Energy Price Guarantee (EPG) for an additional three months. This policy, implemented by Liz Truss in September of the previous year, was devised to cap household electricity and gas expenses at £2,500. The government would cover any additional costs owed to providers under the Energy Price Cap, as regulated by Ofgem. This extension means that households can continue to benefit from this financial relief.

The possibility of raising the Energy Price Guarantee (EPG) to £3,000 had reportedly crossed Mr Hunt’s mind. This decision could have been less generous but would have relieved the state’s financial load. However, he ultimately chose to extend the current guarantee into the months of April, May, and June.

Addressing Parliament during his Spring Statement, the Chancellor said, “With the prevalence of high energy bills being a significant concern for households, we’ve decided to maintain the energy price guarantee at its existing level.”

He added, “As we anticipate a decrease in energy bills from July onwards, this provisional modification will serve as a bridge to alleviate the stress on households and assist in lowering inflation as well.”

In the absence of this aid, from January to April, the average household would have faced an annualized bill of £4,279. However, the EPG implementation reduced this to £2,500, with the government covering the remaining £1,779.

Following this, Ofgem lowered the price cap by 23 per cent to £3,280 for the year’s second quarter. This reduction, combined with Mr Hunt’s decision, will ensure the public continues to be protected from the full payment. It also implies the state’s payout will be significantly less, around £780 per household.

Benefits going out as usual

Standard state assistance, encompassing benefits and pension payments, will proceed without interruptions this June as there are no bank holidays to potentially disrupt the usual delivery dates.

Recipients of any of the following from the Department for Work and Pensions (DWP) can anticipate their usual disbursement dates this month.

  • Universal credit
  • State pension
  • Pension credit
  • Disability living allowance
  • Personal independence payment
  • Attendance allowance
  • Carer’s allowance
  • Employment support allowance
  • Income support
  • Jobseeker’s allowance

It’s possible to receive up to five payments designed to assist with living costs if you are a recipient of specific benefits or tax credits.

There is no need for you to submit an application. If you meet the criteria, the payments will be processed automatically and sent to you via your typical benefit or tax credit method. This process will be the same even if your eligibility is determined at a subsequent date

These payments are not taxable and will not affect the benefits or tax credits you get.

Understanding the Cost of Living Payment: An Overview of Low-Income Benefits and Tax Credits

If you are a recipient of any of the benefits or tax credits listed below on specific dates, you could potentially be eligible for up to three Cost of Living Payments of £301, £300, and £299:

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

These payments will be distributed separately and will not be bundled with your regular benefit payments.

If you have a joint claim on the qualifying dates, a single payment of £301, £300 and £299 will be sent using the same payment method used between these dates, if you’re eligible.

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