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Millions set for £650 cost of living payment from July

Paloma Kubiak
Written By:
Paloma Kubiak

Over eight million households will receive the first of two instalments totalling £650 from July to cover the rising cost of living.

Low-income households in England, Wales, Scotland and Northern Ireland will receive the first £326 payment from 14 July, while the second £324 payment will be made in autumn (date to be announced soon).

In order to get the £650 payment, households must be in receipt of any of the following benefits: Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit or Pension Credit.

To be eligible for the first instalment, people needed to be in receipt of one of these benefits, or have begun a claim which is later successful, as of 25 May 2022.

The Department for Work and Pensions (DWP) confirmed this payment will be tax-free, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

If you have a joint claim with a partner, you will get one payment of £326 and one payment of £324 for your joint claim, if you’re entitled. The DWP said the payments are deliberately slightly unequal to minimise fraud risk.

Households in receipt of the new style Employment and Support Allowance, contributory Employment and Support Allowance, or new style Jobseeker’s Allowance won’t be eligible.

It follows the government’s announcement last month that all households would receive a £400 discount on energy bills in October, while vulnerable households would receive at least £1,200 to help with the rising cost of living.

This is made up from the direct payment of £650 for over eight million households on benefits, a separate £300 payment for pensioners, and a £150 payment for disabled people, as well as the £400 energy discount and the previously announced £150 council tax rebate.

Work and pensions secretary, Thérèse Coffey, said: “With millions of the lowest-income households soon seeing the first of two cash instalments land into their bank accounts, we are taking action to directly help families with the cost of living.

“This one-off payment totalling £650 is part of our £37bn cost of living support package that will put an extra £1,200 into the pockets of those most in need.”

Chancellor of the exchequer, Rishi Sunak, added: “We have a responsibility to protect those who are paying the highest price for rising inflation, and we are stepping up to help.

“In July over eight million people will get their first £326 payment to help with rising prices, as part of a package worth at least £1,200 for vulnerable families. I said we would stand by people when they needed help, and we are.”