MILLIONS of people will start getting a £299 cost of living payment today – but there’s an important loophole to be aware of.
Those eligible will receive the tax-free payment between February 6 and February 22.
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However, the loophole means some people may miss out on the payment despite seemingly being eligible.
We spoke to Halide Kalfaoglu, benefits expert at Turn2us, to find out who and why.
You’re entitled to the cost of living payment if you get any of the following benefits or tax credits, or are later found to qualify, between 13 November 2023 to 12 December 2023:
- Universal Credit
- Pension Credit
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Child Tax Credit
- Working Tax Credit
However, Halide explains that some people will not be eligible for the cost of living payment even if they are on benefits.
This applies if your benefit payment was reduced to £0 for the qualifying period.
There are instances when your benefit is reduced to zero for certain months, even if you have an ongoing claim for the benefit.
Unfortunately, this means you won’t get the cost of living payment.
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The same applies if your tax credit entitlement for the tax year is below £26.
The only exceptions are:
- Your entitlement reduced to £0 for other reasons, such as payments of rent to your landlord or for money that you owe.
- You had a hardship payment because you got a sanction and could not pay rent, heating, food or hygiene needs.
What is tax credit?
Tax Credits are a type of state benefit. There are two different types: Working Tax Credit and Child Tax Credit.
Working Tax Credits are designed for those earning a low income from work.
Child Tax Credits are for those with kids who may or may not be working.
You can claim one or both tax credits.
Both aim to help households on lower incomes to cover everyday essentials.
When will the cost of living payment be paid?
Most eligible people will get this payment between 6 February and 22 February 2024.
For tax credits-only claimants, this payment will be made a little later between 16 and 22 February 2024.
How is it paid?
You don’t need to claim the cost of living support payment. It is paid automatically if you’re qualified for it.
The money will be automatically credited into the bank accounts of those who qualify for the tax-free payment.
The payment is made separately from your benefit payments.
There are a few different codes to look out for when the payment is made into your bank account.
The payment reference will be the recipient’s National Insurance number followed by DWP COL or HMRC COLS.
For example, if your NI number is JT 83 42 97B, your payment will show up as “JT 83 42 97B DWP COLP” or “JT 83 42 97B HMRC COLP” on your bank statement.
How to report a missing cost of living payment?
If you’re entitled and don’t receive this payment, you will be able to report the missing payment online from 23 February 2024.
The DWP is also encouraging low-income pensioners not already receiving pension credit to check their eligibility.
Successful claims can be backdated by up to three months, meaning thousands more could still qualify for the final cost of living payment.
If you think you qualify but you aren’t claiming pension credit, put in a claim by March 5.
This will ensure that any payments can be backdated and fall within the qualifying period for the £299 cost of living payment.
The first instalment of the £900 cost of living support, worth £301, was paid out to over eight million households in April and May last year.
The second instalment, worth £300, was paid from October 31 to November 19.
It follows the £650 cost of living payment made to over eight million people in 2022.
Why are tax credit claimants getting paid later?
Some people are entitled to both tax credits and other qualifying benefits which are administered by DWP.
HMRC will make payments to eligible claimants receiving tax credits only, shortly after DWP to avoid duplicate payments.
What other support is available?
There is additional support you can seek out if you don’t qualify for the cost of living support payment.
The Household Support Fund is worth £842million and has been shared between councils in England.
They then decide how to distribute their portion, so it’s worth approaching your council to see what help is on offer.
You may be eligible to claim a free grant from your energy provider if you’re struggling to pay your energy bill.
There are several free online calculators you can use to find out what you might be eligible for:
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