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

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

John Glen, chief secretary to the Treasury, 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.”

Automatic payments

HMRC will pay eligible tax credit claimants automatically and the money will be paid into the bank account where claimants already receive their tax credits. 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.

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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.

For tax credit-only claimants 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 DWP recently announced that eligible households receiving DWP means-tested benefits will receive their first cost of living payment for the 2023 to 2024 tax year between 25 April and 17 May. This includes tax credit claimants who also receive other income-related benefits from DWP.

Who qualifies for the cost of living payments?

People who receive any of the following benefits are eligible for the cost of living payments:

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

Those who are eligible for the £301 cost of living payment solely through tax credits (rather than means-tested benefits) are paid by HMRC, while those claiming other benefits will be paid by the DWP.

What to do if you don’t receive your cost of living payment

If tax credit recipients 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.

Cost of living payments are tax-free, don’t count towards the benefit cap, and will not have any impact on existing benefit awards.

The three means-tested cost of living payments are being delivered in three 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 determine if a payee received the correct payment and makes it easier to track payments.