Cost of living payment: 1.1 million households to get £326 next week – who is eligible?

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HM Revenue and Customs (HMRC) confirmed families getting tax credits will get the first instalment of the overall £650 payment. It will be paid to eligible claimants sometime between September 2 to 6 directly into their bank or building society accounts. This support has been introduced to mitigate the financial impact of the ongoing cost of living crisis, which has seen inflation and energy bills soar.

The extra £326 is part of the larger £650 cost of living payment which was introduced by then-Chancellor Rishi Sunak earlier this year.

As part of its delivery to claimants, the payment has been split into two separate instalments with the first currently being rolled out.

As of today, the rollout of the second instalment worth £324 is yet unknown but will be sometime this year.

While tax credit recipients via HMRC are only getting their extra £326 now, those who claim means-tested benefits from the Department for Work and Pensions (DWP) should already have received it.

As a result of this cost of living payment, more than eight million eligible households in receipt of a means-tested benefit will have had the first instalment.

It should be noted that tax credit claimants who also receive benefits from the DWP will have already received their first cost of Living payment from July 2022.

Who is eligible for the £326 cost of living payment?

Here is a list of the payments someone needs to be on to get this extra support:

  • Universal Credit
  • Income-based Jobseekers Allowance
  • Income-related Employment and Support Allowance
  • Income Support, Working Tax Credit and Child Tax Credit
  • Pension Credit

Nadhim Zahawi, the current Chancellor of the Exchequer, noted that “further support” is on the way as the Government awaits the results of the Conservative leadership election.

Mr Zahawi explained: “I know people are really concerned by rising prices so I’m glad that over a million more low earners will shortly receive their first Cost of Living Payment.

“We are also preparing options for further support so the new Prime Minister can hit the ground running.

“Alongside £400 off most people’s energy bills, tax cuts and the Household Support Fund, these direct payments are a very important part of our £37billion package of help for households, which is targeted at those who need it most.”

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Angela MacDonald, HMRC’s deputy chief executive and Second Permanent Secretary, outlined when tax credit claimants will receive this support from the Government.

She added: “This first cost of living layment will provide vital financial support for eligible tax credit-only claimants across the UK.

“A second payment will be made to eligible customers from the winter.

“The money will be paid automatically into bank accounts, so people don’t need to do anything to get this extra help.”

What other support is available?

To help those struggling with the cost of living, the Government has launched various other support payments to mitigate the cost of rising inflation and energy bills.

These include:

  • £400 discount from the Government to help with the cost of energy bills from October onwards
  • £150 council tax rebate for council tax bands A-D in England
  • £300 Pensioner Cost of Living Payment that will be paid alongside Winter Fuel Payments
  • £150 Disability Cost of Living Payment from September 20 for those receiving an eligible UK disability benefit.

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