Low-income households to receive over £2 billion in further cost of living support

Around 8 million eligible households across the UK are set to receive a £299 Cost of Living Payment in February, as the Government unveiled its plans to reward work, reform welfare and grow the economy. 

The third of up to three Cost of Living Payments will be made to eligible people on means-tested benefits between 6 February and 22 February and is part of a support package that has helped millions of households since July 2022. 

The payments come as the Government announced £104 billion will be spent on cost of living support between 2022 and 2025 in November’s Autumn Statement – worth around £3,700 per household.

Measures include: 

• Uprating benefits by 6.7%  

• Increasing the state pension by 8.5%  

• Increasing the Local Housing Allowance by £7 billion   

A Government spokesperson said:

"Our economy has turned a corner, and we are moving away from the big government, high spending, high borrowing, and high tax approach that was necessary before, and focusing on the long-term decisions required to strengthen our economy and give people the opportunity to build a wealthier, more secure life for themselves and their family. 

"As part of this, we announced that millions of the most in need will benefit from DWP’s next generation welfare reforms, including unprecedented employment and health support.  

"The Government’s £2.5 billion Back to Work Plan provides new funding for a range of schemes designed to help people both find and stay in work, benefitting over a million people with disabilities, health conditions, or long-term unemployed. A new Chance to Work Guarantee will tear down barriers to work for millions of claimants to try work with no fear of reassessment or losing their health benefit top-ups."

The £299 payment in February 2024 will be sent automatically by the DWP and HM Revenue and Customs, so eligible people do not need to apply or take any action to receive it.  

Jeremy Hunt, Chancellor of the Exchequer, added:  

"Inflation has halved, but I know some families are particularly vulnerable to cost of living pressures, which is why these payments are so important.  

"The best way we can help families is by getting more people into good jobs, including through our Back to Work Plan which will help more than 1 million people look for work and grow the economy."

The Government said it's "drive to help the most vulnerable has seen 1.7 million fewer households in poverty than in 2010. As part of this support, the Local Housing Allowance increase, which will benefit thousands, comes into force in April 2024. The £7 billion investment over five years will benefit around 1.6 million households who will be around £800 a year better off."

The DWP also continues to encourage low-income pensioners not already getting Pension Credit to check their eligibility, as they could still qualify for the cost-of-living payment in February.   

Eligibility

To be eligible for the Cost of Living Payment from DWP, you need to have been entitled to a payment for a qualifying benefit between 13 November and 12 December, or payment for an assessment period, ending between these dates.

The full list of benefit recipients that qualify for the third Cost of Living Payment are those who are eligible and receive at least one of the following:  

• Universal Credit;  

• income-based Jobseeker’s Allowance;  

• income-related Employment and Support Allowance;  

• Income Support;  

• Working Tax Credit;  

• Child Tax Credit;  

• Pension Credit  

To get the £299 payment someone must (subject to a very limited exception) have been entitled to a payment of a qualifying benefit as follows:   

• For Universal Credit, payment for an assessment period ending between 13 November 2023 to 12 December 2023  

• For all other DWP means-tested benefits, payment in respect of any day between 13 November 2023 to 12 December 2023  

• For tax credits-only customers, a payment of tax credits in respect of any day in the period 13 November 2023 to 12 December 2023 or later be paid in respect of any day in this period  

• Those on DWP benefits other than Universal Credit who are entitled to less than 10 pence and meet all other qualifying criteria but who do not receive a benefit payment, will still receive a Cost of Living Payment.  

If a household becomes retrospectively entitled to a Cost of Living payment or believe they are entitled but do not receive one, they can report this via gov.uk from the 23 February.

It is one of three means-tested Cost of Living Payments made over 2023/24, worth up to £900 in total.

For joint Tax Credits 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.