Yesterday (26th May 2022) the UK Government announced measures aimed at reducing the impact of the cost of living crisis. We are pleased to see measures being taken as these are much needed to help the many people who through no fault of their own are finding it harder to get by. We have provided a summary below.

When more information becomes available as to how these payments will be treated for the purposes of entering into a statutory debt solution we will share this.

 

Energy bills support scheme

All UK households will receive a grant of £400 (up from the previous figure of £200 which was to be repaid) to support with energy bills. Energy suppliers will credit the sum to accounts of direct debit customers, and pre-payment meter customers will have the amount applied to their meter or will receive a voucher. The support will be available from October when the next energy increase comes into effect.

One-off payment of £650 for households in receipt of benefits

Households in receipt of means-tested benefits (including Universal Credit, Income-based Jobseekers Allowance, Income-related Employment and Support Allowance, Income Support, Working Tax Credit, Child Tax Credit, and Pension Credit) will receive a one-off payment of £650 directly. The payment will be made in two instalments, the first in July and the second in autumn (we do not yet know when in the autumn). Importantly, people must already be in receipt of (or have already begun an eventually successful claim for) one of these benefits as of 25^th May 2022.

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

 

 One-off £200-£300 Pensioner Cost of Living Payment

Pensioner households that receive the Winter Fuel Payment will receive a one-off payment of £200-£300 to help with rising fuel costs. The payment will come as a top-up to annual Winter Fuel Payments in November/December. For most pensioner households, this will be paid by direct debit, is not taxable and does not affect eligibility for other benefits. The payment will be made on top of other payments that the recipient is entitled to.

 

One-off £150 Disability Cost of Living Payment

People who receive Disability Living Allowance, Personal Independence Payment, Attendance Allowance, Scottish Disability Benefits, Armed Forces Independence Payment, Constant Attendance Allowance and War Pension Mobility Supplement will receive the support as a one off payment in September. Importantly, people must already be in receipt of (or have already begun an eventually successful claim for) one of these benefits as of 25^th May 2022.

For those in receipt of disability benefits as well as means-tested benefits, the £150 will be additional to the £650 mentioned above. These payments will be exempt from tax, will not count towards the benefit cap, and will not have any impact on existing benefit awards.

 

Peter Costello, CEO of Money Advice Scotland said: 

“We are pleased to see some much-needed support be introduced to help with the worsening cost of living crisis. These measures should provide some relief for those most affected and we are pleased to see support being directed to those on the lowest incomes. We are encouraged that payments to people in receipt of benefits will not count towards the benefits cap. However, we know that these measures will not end the cost of living crisis and we need to ensure that those who are affected most continue to receive the support they need as the crisis continues.”

For more information, see the UK Government website.