Cost of Living payment: Who is eligible and when will the first half of the £650 payment be issued?

The country is currently in the midst of a cost of living crisis, and Chancellor Rishi Sunak has announced measures aimed at relieving some of the pressures that households are facing.

A grant was announced in May, as part of a range of measures that also included a “windfall tax”, on energy giants and a doubling of the existing £200 energy rebate.

Speaking earlier this week, Sunak confirmed that there would be a £15 billion injection of support to help people through dire times, as energy costs are set to soar to £2,800 this year.

Sunak said: “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, more than 8 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”.

Over the last three months to April, base pay fell 2.2 per cent, after inflation was taken into account.

In just a few weeks, 8 million homes will see the first part of the £650 payment hit their bank accounts - but, who is eligible, and, when will the payments be issued?

Here is everything you need to know.

Who is eligible for the £650 payments?

According to the Government’s official guidance, you may be eligible if you’re getting any of the following:

• income-based Jobseeker’s Allowance

• income-related Employment and Support Allowance

• Income Support

• Pension Credit

• Universal Credit

• Child Tax Credit

• Working Tax Credit

The Government also advises that you will need to be in receipt of one of these benefits, or will need to have had a successful claim, by Wednesday, May 25.

Means-tested payments are made based on your income, and how much capital you have - if someone can demonstrate that their income and capital are below a certain level, they qualify.

The Government says: “You will not get a payment if you have already received a Cost of Living Payment from HMRC because you were entitled to tax credits.”

In an interview with the Chancellor, Martin Lewis highlighted that people on certain benefits would miss out. There is also concern that the very poorest don’t realise that they’re eligible for payments, making them more difficult to target.

When will people get the first half of the payments?

The Government has announced that the payment will be issued into people’s bank accounts for families on means-tested benefits in two lumps, one in July and one in autumn.

The first instalment of the £650 will automatically land in bank accounts from 14 July, continuing to the end of the month.

For those people who qualify for the one-off payment through tax credit or working tax credit, the two instalments will be paid in autumn and winter instead.

For joint benefits claimants, the government advises: “If you have a joint claim with a partner, you will get one payment of £650 for both of you, paid in two lump sums from July 2022 and in autumn 2022, if eligible.”

If you are eligible for the payment, there is no need for you to apply – the £650 will be submitted to you automatically.

It will be tax-free for all eligible groups, will not affect the benefit cap and will not affect existing benefit awards.

Mr Sunak said: “DWP will make the payment in two lump sums, the first from July, the second in autumn, with payments from HMRC for those on tax credits following shortly after.”