Millions of low-income households to get new Cost of Living Payments from Spring 2023

Millions of the lowest-income households across the UK will get up to £1,350 from the Government in 2023/4 to help with the cost of living.

The Department for Work and Pensions (DWP) has today announced more detail on the payment schedule for the next round of cost of living support unveiled in the Chancellor’s Autumn Statement, building on payments made to over eight million people in 2022.

The new £900 cash boost for over eight million eligible means-tested benefits claimants, including those on Universal Credit, Pension Credit and tax credits, starts in Spring and will go direct to bank accounts in three payments over the course of the financial year. There will also be a separate £150 for over six million disabled people and £300 for over eight million pensioners on top of their Winter Fuel Payments.

Exact payment windows will be announced closer to the time, but are spread across a longer period to ensure a consistent support offering throughout the year. They will be broadly as follows:

• £301 – First Cost of Living Payment – during Spring 2023
• £150 – Disability Payment – during Summer 2023
• £300 – Second Cost of Living Payment – during Autumn 2023
• £300 – Pensioner Payment – during Winter 2023/4
• £299 – Third Cost of Living Payment – during Spring 2024

Work and Pensions Secretary, Mel Stride said:

“We are sticking by our promise to protect the most vulnerable and these payments, worth hundreds of pounds, will provide vital support next year for those on the lowest incomes.

“The government’s wider support package has already helped more than eight million families as we continue to deal with the global consequences of Putin’s illegal war and the aftershocks of the pandemic.”  

Chancellor of the Exchequer, Jeremy Hunt added:

“I know these are tough times for families across the UK who are struggling to meet rising food and energy costs, driven by the aftershocks of Covid and Putin’s war in Ukraine.

“That’s why we’re putting a further £900 into the pockets of over 8 million low income households next year. These payments are on top of above inflation increases to working-age benefits and the Energy Price Guarantee, which is insulating millions from even higher global gas prices. 

“Tackling inflation is this government’s number one priority and is the only way to ease the strain of high prices, drive long term economic growth and improve living standards for everyone.”

If individuals are eligible they will be paid automatically, and there will be no need to apply. Claimants who are eligible for any of the Cost of Living Payments and receive tax credits, and no other means-tested benefits, will receive payment from HMRC shortly after DWP payments are issued.

These payments build on the Government’s extensive support package to help households tackle the globally rising cost of living stemming from the pandemic and the war in Ukraine.

The Government’s Energy Price Guarantee continues to cap energy costs, saving the average household around £900 this winter and a further £500 in 2023/24. Benefits, including working age benefits and the State Pension, will also rise in line with inflation from April 2023, ensuring they increase by over 10%. April will also see the biggest ever cash rise to the National Living Wage, bringing it to £10.42 an hour, and a further year-long extension of the Household Support Fund in England and associated devolved nation funding worth £1 billion in total.

This comes on top of the 2022 support package, which included:

• A £650 Cost of Living payment for means-tested benefit claimants, split into two payments, each of which supported over eight million households
• Further £300 and £150 payments, which reached over eight million pensioners and over six million disabled people respectively
• A £150 Council Tax rebate for all households in Council Tax bands A-D
• A £400 energy bill discount for all households, which will continue to run through March

Ends

Notes to Editors

1. For each payment, exact payment start dates and eligibility criteria will be communicated by the Department before payments begin. HMRC will communicate details for tax credit-only customers.

• These payments will all be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.   
• More than 8 million households on benefits will receive payments of up to £900, made in three lump sums. Eligible households will be on one of the following benefits: Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit and Pension Credit.
• The £900 Cost of Living Payment will be delivered in three slightly different amounts. The distinct value relates to a specific qualifying period, so it is simpler to determine if a payee received the correct payments, reducing the fraud risk of people who claim not to have had one of the specific three payments, as DWP and HMRC will be able to clearly track those who have.
• Low-income households are benefiting from Government support in a variety of different ways. You can read more about the Government’s cost of living support and what is available here.