One million families claiming tax credits to receive Cost of Living Payment from 2 May

One million eligible claimant families receiving tax credits, and no other means-tested benefits, will get the first Cost of Living Payment for the 2023 to 2024 tax year from Tuesday 2 May 2023, HM Revenue and Customs (HMRC) has confirmed.

The £301 government payment will be paid automatically into most customers’ bank accounts between Tuesday 2 and Tuesday 9 May 2023 across the United Kingdom. Only eligible families who receive tax credits and no other means-tested benefits will receive the payment from HMRC.

This is the first of three payments totalling up to £900 for those eligible in the 2023 to 2024 tax year.

Chief Secretary to the Treasury, John Glen, said:

Higher prices make life difficult for everyone, which is why our priority is to halve inflation this year.

But we are also going further to support those struggling most, with a total package of support worth an average of £3,300 per household this year and next – including up to £900 in direct cash payments starting next month for families receiving tax credits.

Angela MacDonald, HMRC’s Deputy Chief Executive and Second Permanent Secretary, said:

The £301 Cost of Living Payment will deliver vital financial help to eligible tax credit customers across the UK. Further support will be paid in autumn 2023 and spring 2024 to those entitled to payment.

HMRC will pay eligible tax credit customers automatically and with no action required from the customer, to make this as simple and helpful as it can possibly be.

The payment will show as ‘HMRC COLS’ in customers’ bank and building society accounts, so that they know the money is cost of living support.

For tax credit-only customers to be eligible for the £301 Cost of Living Payment, they must have received a payment of tax credits in respect of any day in the period 26 January to 25 February 2023, or later be found to have been entitled to a payment for this period.

Eligible customers do not need to apply or contact HMRC to receive the payment.

The Department for Work and Pensions (DWP) recently announced that eligible households receiving DWP means-tested benefits will receive their first payment for the 2023 to 2024 tax year between Tuesday 25 April and Wednesday 17 May. This includes tax credit claimants who also receive other income-related benefits from DWP.

The payments are part of a package of wider government support announced to tackle the cost of living in the 2023 to 2024 tax year, including:

• a further £300 Cost of Living Payment for eligible families in autumn 2023, with a payment of £299 in spring 2024
• a £150 Disability Cost of Living Payment for eligible disabled people to be paid during summer 2023
• a £300 Pensioner Cost of Living Payment to be paid during winter 2023-24.

This means that the most vulnerable can receive up to £1,350 in direct payments over the coming financial year if eligible.

Including both DWP and HMRC payments, the latest Cost of Living Payment will see more than 8 million households across the UK receive their £301 cash boost by mid-May 2023.

The government is offering help for households. Customers should check GOV.UK to find out what support they could be eligible for.

Additional information

To receive the £301 payment someone must (subject to a very limited exception) have been entitled to a payment of a qualifying benefit as follows:

• eligible tax credit-only customers, who will receive the £301 payment between 2 and 9 May 2023, must have received a payment of tax credits in respect of any day in the period 26 January 2023 to 25 February 2023, or later be found to have been entitled to a payment for this period.
• for joint claimants, where one claimant receives Working Tax Credit and the other claimant receives Child Tax Credit, payments will be made into the same bank account as the Child Tax Credit.
• to be eligible for the DWP payment, families must have been entitled to a payment (or later found to be entitled to a payment) of either:

Universal Credit - payment for an assessment period ending between 26 January 2023 and 25 February 2023.

For all other DWP means-tested benefits, payment in respect of any day between 26 January and 25 February 2023.

• receiving a previous Cost of Living Payment does not mean you will be entitled to a future one. Customers will need to meet the separate eligibility criteria for each payment.

Customers do not need to apply for this payment. If customers are eligible through receiving tax credits only, HMRC will make the Cost of Living Payment automatically into the bank account where claimants already receive their tax credits. Customers might find that their payment is delayed if they have recently closed the bank account their tax credits are usually paid into.

If customers have not let HMRC know that their bank account has changed, HMRC will pay the money into their old bank account, meaning the payment will be rejected. If this happens, HMRC will follow this up by letter to the customer, letting them know that we need updated bank details.

If tax credit customers believe they are eligible but have not received a payment between the published payment dates, they should wait until 16 May 2023 at the earliest to contact HMRC. This is to allow time for their bank, building society or credit union to process the payment. We will not be able to provide customers with any further information before this date.

More than 8 million families on means-tested benefits will receive up to £900 during the 2023 to 2024 tax year, in up to 3 payments. This includes all eligible families entitled to a payment 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.

This payment is tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

The 3 means-tested cost of living payments are being delivered in 3 slightly different amounts of £301, £300, and £299. The distinct value relates to a specific qualifying period before the payment is made. This allows HMRC and DWP to ensure support is targeted at those who need it and are eligible; to determine if a payee received the correct payment and identify the payment value; and to reduce the risk of fraud as HMRC and DWP will be able to clearly track those who have received payment.

Beware of scams targeting cost of living payments. If someone contacts you about this payment saying they are from HMRC, it might be a scam.

You do not need to apply for this payment. HMRC will never ask for your bank details by SMS or email. Do not let yourself be rushed. Check advice on spotting scams by visiting GOV.UK and searching ‘phishing and scams’. You can also find ways to contact us on GOV.UK – search ‘Contact HMRC’ and choose ‘tax credits’.

Further information

The payment reference ‘HMRC COLS’ refers to cost of living support.

Payment windows and eligibility criteria for the remaining cost of living payments will be announced in due course.

For more information on these payments, please visit www.gov.uk/guidance/cost-of-living-payments-2023-to-2024